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Us 50, California 31, U.s. 26, Ms. Woolsey 23, Afghanistan 22, Ms. Lee 15, Massachusetts 12, United States 12, Iowa 11, Mr. Markey 11, Florida 11, Brac 10, Pentagon 10, America 7, Washington 7, Tennessee 6, Mr. Poe 5, Mr. Cohen 5, Mr. O'keefe 5, Panetta 5,
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  CSPAN    Capitol Hill Hearings    News/Business.  

    July 18, 2012
    8:00 - 1:00am EDT  

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total $39 billion below the requests. my point is that we have cut defense. but we've done so reasonably, without impacting readiness or threatening the department's ability to protect our nation and our allies. this fiscal year 2013 budget is the first we've seen where there are identifiable and significant risks associated with the budget decisions we've made. we've talked about that a lot today. our pivot toward the asia-pacific, the growth capability of china, things on the north korean peninsula. for example, cutting ships and reducing required navy ship fleet size, retiring large numbers of aircraft, some of which have been delivered in significantly underfunding facility maintenance and modernization. we've tried to mitigate these as be we could within our given
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allocation. speaking of our allocation, it's essentially in line with the ryan budget as well as the defense authorization bill, both of which passed the house. . c.b.o., in their most recent analysis of the department's future year's defense program, they did their analysis and determined the department's plans will cost $123 billion more than they project over the next five years. national security, of course, should never be subject to partisan politics and we should show our support to our men and women who sacrifice so much and continue to do so on our behalf. and i yield back the balance of my time. the chair: the question is on the amendment offered by the gentlelady from california. those in favor say aye. those opposed, no. in the opinion of the chair, the noes have it. ms. woolsey: mr. chairman, with that, i would request a recorded
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vote. the chair: pursuant to clause 6, rule 18, further proceedings on the amendment offered by the gentlelady from california, will be postponed. for what purpose does the gentleman from massachusetts rise? >> mr. chairman, i have an amendment at the desk. the chair: the clerk will report the amendment. the clerk: amendment offered by mr. markey of massachusetts, at the end of the bill before the short title, insert the following, section, none of the funds made available by this act may be used to operate or maintain a -- mr. frelinghuysen: i would like a copy of the amendment, please. reserve a point of order until we have a chance to look it over. the chair: the gentleman reserves a point of order. the gentleman from massachusetts is recognized for five minutes. mr. markey: i thank you. current nuclear arsenal has significant overkill that is built into it. our country continues to spend
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moran more taxpayer money on nuclear weapons. and even though the president and the senate have already agreed to reduce the number of deployed nuclear weapons. even though there is a growing bipartisan consensus that the united states has an excessive number of nuclear weapons and that the united states spends far more than it needs for a nuclear deterrence and defense. and that is why i rise today to offer my amendment to reduce the number of deployed intercontinental ballistic nuclear missiles from 450 to 300. i believe that this is the soundest approach to both our national security and our economic security needs. each of our land-based nuclear missiles cost us -- and this is an incredible number, but each nuclear nuclear missile costs us
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$2.4 million every year to operate and maintain. my amendment would save the taxpayers about $360 million next year and every year after that. and it's not just arms control groups who support this departure from cold war thinking. it also includes general james cartwright who until last year was the commander of the united states nuclear forces. general published a report in may that concludes that zero intercontinental ballistic missiles are necessary for our nuclear deterrence or defense. the former commander of u.s. nuclear forces doesn't think we need icbm's at all. reducing the number from 450 to 300, still leaves more than enough missiles for an effective
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nuclear deterrent. that is still more than enough missiles tore i nile ate our enemies over and over. that's how many nuclear weapons we would still have in reserve. that is a real savings. and that savings can be used for the n.i.h. budget. the entire budget to find the cure of alzheimer's, 5 million americans have it. we just cut out these i.c.b.m. and that gives us must have money to double the cure for something that really is going to kill americans and does terrify them in their homes. so i pray that the house would assess this amendment. it sends us in the correct direction that we should be
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heading in terms of protecting the american people. mr. dicks: i compliment the gentleman on what we discussed in the last go-around and taking a hard look at land-based icbm's, which have been the most vulnerable part of the triad and the most invulnerable part is our bombers. but the land-based icbm's are vulnerable. and i do believe we can bring down the amount of money we are spending on strategic forces and the focus should be as the general suggested, in reducing the icbm's. this is a way to start this debate. i'm going to support the gentleman's amendment. mr. markey: i would note here
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that the gentleman from washington state did pioneering work in the 1980's in identifying the vulnerability of the icbm fleet and that discussion continues out here on the house floor. mr. dicks: we had a great discussion about sinner guy of the three legs of the triad but i have always believed that the land-based segment of the triad -- and i agree with the gentleman's overall premise that we don't need as many nuclear weapons. i can remember john lay man saying to me, if you want to cut something, cut the submarines and go ahead with the aircraft carriers and more airplanes and they are conventional weapons and more usable. the chair: the gentleman's time
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has expired. for what purpose does the gentleman from new jersey rise? mr. frelinghuysen: i withdraw my point of order and i move to strike the last word. the chair: the gentleman is recognized for five minutes. mr. frelinghuysen: normally the committee is given the courtesy of seeing the amendments. i believe the gentleman from massachusetts has lacked the courtesy of letting the committee have copies of your amendment. and let me say as a nation, we still believe in a nuclear deterrent. and the last time i checked, there has been bipartisan support for that. both mr. visclosky serve on the energy and water committee and part of our jurisdiction is to make sure the president of the united states, our commander in chief, verifies that we have nuclear capabilities. and the last time i checked, the administration was conducting what we call a nuclear posture
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review relative to what our positions shall be in negotiations with other nuclear powers in terms of the type of weapons that are so critical to the nuclear triad. so with all due respect to the gentleman from massachusetts who referred to a lot of what we said -- he referred to earlier in the day of the fantasy land of our bill. it would be good action to have some facts from the nuclear posture review for the members of congress to consider before we consider something here which might put our nation at risk. and so, i strongly oppose this amendment and urge my colleagues to do so as well. and i now yield. the chair: the gentleman yields back the balance of his time.
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the question is on the amendment offered by the gentleman from massachusetts. those in favor say aye. those opposed, no. in the opinion of the chair, the noes have it. and the amendment is not adopted. mr. markey: on on that, i request the yeas and nays. the chair: the gentleman ask for a recorded vote? mr. markey: yes, i do. the chair: pursuant to clause 6, rule 18, further proceedings on the amendment offered by the gentleman from massachusetts will be postponed. for what purpose does the gentlelady from california rise? lee -- ms. woolsey: mr. chairman, i have an amendment at the desk. it is woolsey 040. the chair: the clerk will report the amendment. the clerk: amendment offered by ms. woolsey of california. at the end of the bill before the short title insert the following, section, the total amount of appropriations made available by this act is hereby reduced by $293 million. the chair: the gentlelady is
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recognized for five minutes. ms. woolsey: mr. chairman, whenever we debate the defense appropriations bill, i feel like i'm living in an alternative universe, because the other 51 weeks of the year, all i hear from my republican colleagues is that the sky is falling and we have to rein in a defense that is wildly out of control. but when it comes to the military budget, that rhetoric is no where to be heard. and my friends in the majority become the biggest spenders of all. if cutting spending is a matter of such great urgency, then i believe the pentagon, which has been generously funded over the years, can pitch in its share. why does the programs that americans depend on for basic needs have to take the budget hit? for example, under the labor-h.h.s. appropriations bill, the title 10 program is not just trimmed, but completely
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zeroed out. for more than 40 years, title 10 has been a life-saving source of family planning sources and preventive health-care for millions and millions of low-income weapons. pap tests, early breast exams, uninsured women depend on title 10 in order to receive these vital services at clinics nationwide. the proposed elimination of funding would be devastating to these women and to their families. and it's critical to point out, mr. chairman, by law, not a single penny of title 10 money is used to perform an abortion. if, however, you want to reduce unintended pregnancies as the other side it does, there is no more effective program than title 10. title 10 was signed into law by
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president nixon. and historically enjoyed broad bipartisan support. at least until the republican congress decided to launch a war on women. now they want to eliminate funding for the program completely. we spent $294 million on title 10 last year. to put things in perspective, mr. chairman, that is less than what we spend on any given day to continue a failed military occupation of afghanistan. mr. chairman, if we're going to ask poor women to give up all the benefits they have received from title 10, then i think we can ask the pentagon to give up the exact amount -- the exact same amount $293 million. it's so big, it makes my head
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spin. if we did that, we'd be saving the misguided eliminations of title 10. that's what my amendment does, because i believe women need to access life saving health-care, at least as much as the military needs another $293 million. in fact, in my -- if my republican colleagues that the deficit is a moral crisis demanding sk cry files from everyone, then i'm confident they are going to support my amendment. i yield back. the chair: the gentlelady yields back. for what purpose does the gentleman from florida rise? mr. young: mr. chairman, i rise in opposition to the amendment. the chair: the gentleman is recognized for five minutes. mr. young: mr. chairman, i don't know how many times that i have said this on this floor and in the committee and anyone that would listen, you cannot make
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your decisions on national defense based on politics. you can't make your decision based on national defense just on a number. and this number, by the way, on this amendment has changed. where's the commitment? the policies and the investment in our national defense must be based on the real threat to our own security, to the security of the united states and to the security of our troops and to the security of our allies and our interests, whatever they might be. now stop and think, the threat has not diminished. the threat has not gone away. did anybody happen to watch iran's exercises last week where they fired short-range missiles and medium-range missiles and
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long-range missiles. iran is moving to make itself a strong, strong military capability nation. that is a threat. there are commentaries about the united states and to the united states that's a threat. we have got to be careful. china is expanding its military, expanding its technology, expanding its work in cyber. the threat is growing. and so this is not the time to reduce our capability to reduce our readiness, to reduce in preparing our troops for whatever is required to defend the nation that we love so much. this amendment just can't go. and i strongly ask for the members to oppose this amendment and the message that it would send around the world that we don't care about the threat
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because we do care about the threat, and we are aware of the threat and we know what it could mean to us. i yield back, mr. chairman. . the chair: the secret yields back. the question is on the amendment offered by the gentlelady from california. those in favor say aye. those opposed, no. the noes have it. the amendment is not adopted. ms. woolsey: i ask for a recorded vote. the chair: purr sune to clause 6 of rule 18, further proceedings on the amendment of the gentlelady from california will be postponed. for what purpose does the gentleman from new jersey rise? >> i have an amendment at the desk. the chair: the clerk will report the amendment. the clerk: amendment offered by mr. lo beeon dee -- lobiondo of new jersey. none of the funds may be used
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except in accordance with the constitution. -- the fourth amendment to the constitution. the chair: the gentleman is recognized. mr. lobiondo: the fourth amendment is clear that the right of the person to be safe in their house and person shall not be violated. i'm a firm believer in this and also in article 1, that congress shall have the right to provide for the defense of the united states. therefore i offer my amendment to ensure that no funding will be used to operate unmanned aerial systems except those operations that are in accordance with the fourth amendment. we need to make sure our citizens are explicitly -- our citizens explicitly understand that while funding for these platforms is critical for those activities, these operations will not conflict with our constitutional protections against unreasonable searches. the language would ensure that
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there's no misperception about the department's use of technologies and i urge its adoption. the chair: the gentleman yields back? mr. lobiondo: i yield back. the chair: for what purpose does the gentleman from florida rise? mr. young: i rise in support of the amendment. the chair: the gentleman is recognized for five minutes. mr. young: i yield back my time. the chair: the gentleman yields back. for what purpose does the gentleman from washington rise? mr. dicks: i have no objection. the chair: the question is on the amendment offered by the gentleman from new jersey. those in favor say aye. those opposed, no. in the opinion of the chair, the ayes have it. the amendment is adopted.
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for what purpose does the gentleman from arizona rise? mr. flake: i have an amendment at the desk. the chair: the clerk will report the amendment. the clerk: amendment offered by mr. flake of arizona. mr. flake: i ask unanimous consent that the read being dispensed with. the chair: without objection. the gentleman is recognized for five minutes. mr. flake: thank you. this amendment would prohibit the use of funds to enter into a contract with a company for leakproof drip pans unless the contract is awarded using competitive procedures as defined by statute. a recent article in "the new york times" highlights the story of a for-profit company being the sole source for leak pans. the pans cost $17,000 apiece and the army has purchased $6.-- has purchased 6.5 million
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of them. congress decreed the use of a leakproof drip pan and the contract was awarded without bid. i think we should all agree that there needs to be a faired by. the army indicated it might get more pans if the financing is approve the department of defense is in the process of slashing its budget. they're learning to do more with less. as americans all over the country have had to do in the past several years. if a competitor exists who will produce these pans for less than $17,000 apiece, we ought to make sure they compete for the project. the amendment before us now would not prohibit the procurement of the pans even if it is determined that there is one company that con supply the army with them.
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now if there's -- if there's only one company, but it would ensure that any purchase of the pans is done in a manner consistent with competitive procedure, putting to rest any notion that congress mandated sole-source contracts for private companies. this is a good governance, common sense amendment. i urge my colleagues to adopt it and i look forward if there's any objection, i think it's a good amendment, but i would love to be able, i can't reserve my time but i would love to have a dialogue if somebody has an issue with this amendment. i yield back. mr. dicks: would the gentleman yield? mr. flake: i would. mr. dicks: you're saying you've got to have a competitive procedure. mr. flake: that's correct. mr. dicks: this is, i think, what we tried to do a few years ago on defense-related with private companies is to have a competitive procedure. which i think -- which i agree
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with and think the gentleman is right on this i appreciate his amendment. mr. flake: i thank the gentleman. i yield back. oh, go ahead. the chair: for what purpose does the gentleman from florida rise? mr. young: i rise in support of the amendment. the chair: without objection, the gentleman is recognized for five minutes. mr. young: mr. chairman, i support the gentleman's amendment, it has been long standing practice put in place by appropriations legislation years ago that the contracts for these pans must be awarded under a competitive process. in fact, the f.y. 2010 d.o.d. appropriations bill required that the contract be competitive. and every year the army holds an open competition where it asks all qualified companies to place a bid. therefore, mr. chairman, i don't think the amendment is
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necessary, but i do agree with what it does and i accept the amendment. mr. flake: would the gentleman yield for a second? mr. young: i do. mr. flake: i know we have made efforts in the past to make sure these are all competitively bid, but the reason i'm bringing this amendment, the army stated in this case that this contract was not competitively bid. we just want to make sure. that's why i appreciate the gentleman accepting this. mr. young: and we do understand that the law does exist that requires it, so we're with you. mr. flake: thank you. mr. young: i yield back. the chair: the gentleman from florida yields back. the question is on the amendment offered by the gentleman from yea. those in favor say aye. those opposed, no. in the opinion of the chair, the ayes have it. the amendment is adopted. for what purpose does the gentlelady from california rise? >> thank you, mr. chairman. i have an amendment at the desk. lee-139. the chair: the clerk will report the amendment. the clerk: amendment offered by ms. lee of california.
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at the end of the bill, before the short title, insert the following -- ms. lee: i ask for unanimous consent that it be considered as read. the chair: without objection -- mr. young: i reserve a point of order on the gentlelady's amendment. ms. lee: -- the chair: a point of order is reserved. the gentlewoman is recognized. ms. lee: i join with my colleague, january schakowsky, with an amendment that hit ats the heart of fiscal responsibility. if enacted, this would freeze department of defense programs at fiscal year 2008 levels unless the financial statements of the department of defense for fiscal year 2013 are validated as ready for audit within six months of an -- of enactment of this act. this would exempt military personnel, reserve, and national guard personnel accounts as well as the defense health program account from
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this potentially funding freeze. it also contains a waiver for any potential harm to national security or combat forces. now some of my colleagues may make the argument that the department of defense is making progress on this issue in response to congressional engagement. they might reference language in recent defense authorization bills requiring d.o.d. to develop separate and implement plans to achieve audit readiness by september 30, 2017. but 2017, let me just say, mr. chairman, this is wholly unacceptable that we are still just developing plans for the department of defense to have the fiscal house in order five years from now. this problem is not newly discovered and further delay is really an abandonment of our congressional duty, given the enormous and increasing proportion of federal dollars going toward the defense budget. in the 1990's, congress was
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promised these financial defense -- was promised that these financial deficiencies would be solved by 1997. this timeline then was delayed to 2007 in the early 2000's. given the pentagon's past failures to meet deadlines, why should we believe the 2017 timeline will be honored? nearly of cents of every discretionary dollars goes to defense spending and by the pentagon' own admission, they can't account for how the money is spent. can you imagine? we have nonprofit organizations that get shut down behind a few thousand dollars in unaccountable funds. there's no doubt that these circumstances have contributed to instances of waste, fraud, and abuse at the pentagon including more than $300 billion in major weapons cost overruns, identified by the government accountability office. it's time to finally do away with the culture of unlimited
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spending and no accountability at the pentagon. being strong on defense does not heen handing a free pass to irresponsible spending. i believe a critical -- i believe it's critical that the department of testifies be not only prepared and validated as ready for an audit but actually pass an audit system of today i urge my colleagues to support this amendment and take a first step toward compeling the department of defense to act with urgency on this matter. the financial reforms necessary to abide by basic accounting standards, laws, and regulations at the department of defense cannot wait. i deeply regret my colleague would invoke a point of order on an issue of such vital importance to congress' charge to conduct responsible oversight on federal expenditures. i wish that the pentagon would be held to the same standard as nonprofit organizations and those in business and other entity responseable for
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responsibly spending federal dollars. thank you and i reserve the balance of my time. the chair: the gentlelady may not reserve. does the gentlelady yield back? ms. lee: yes, i yield back the balance of my time. the chair: the gentlelady yields back. for what purpose does the gentleman from florida rise? mr. young: i make a point of order against the amendment because it proposes to change existing law and constitutes legislation in an appropriations bill. and therefore violates clause 2 of rule 21. the rule states in pertinent part, an amendment to a general appropriations bill shall not be in order if changing existing law. the amendment grants new authority and i ask for a ruling from the chair. the chair: does any other member wish to be heard on the point of order? the chair will rule. the chair finds that this amendment imposes a new duty on
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the secretary to validate certain data as ready for audit. therefore the -- the amendment therefore constitutes legislation in violation of clause 2 of rule 21, the point of order is sustained and the amendment is not made in order. >> i have an amendment at the desk. the clerk: amendment offered by mr. wittman of virginia, add the following new section. section, none of the funds made available for this act maybe used to plan or propose for the base realignment and closure round. the chair: the gentleman from virginia is recognized for five minutes. mr. wittman: none of the funds made available in this act may be used to plan or propose abase realignment or closure brac round. and during the markup of h.r.
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4310 of may 9, a similar amendment passed with overwhelming bipartisan support with a vote of 44 to 18 with 14 to 27 democrats voting in favor of a similar amendment. on february 27, i joined fellow members in signing a letter to president obama expressing our concern over his administration's announcement of the intent to request two new rounds of brac. six armed house servicees subcommittee signed this letter. this estimated to cost $36 billion and the taxpayers will not realize that net savings until 2018 at the earlieriest. congress has funded the military reconstruction accounts to accommodate the growing army and marine corporation. proposed new rounds of military base closures by the president will require additional expenses in at a time of military
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spending reductions. it will negate the value of deficit reduction. more brac rounds will cost billions of dollars and thousands of jobs. in a study that was concluded, d.o.d.'s fiscal year 2011 budget submission to congress on brac, 2005, shows that costs to implement the brac recommendations grew from $21 billion originally estimated by the brac commission in 2005 dollars to about $35.1 billion in current dollars, an increase of $14.1 million or 67%. in constant 2005 dollars, costs increased to $32.2 billion, an increase of 53%. in 2005, the commission estimated net annual reoccurring savings of $2.4 billion and
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present value savings by 2025 of $36 billion. g.a.o.'s analysis shows the savings are now $3.8 billion, a decrease of 9.5% while the present value savings are now about $9. billion, a decrease of 73%. as such, d.o.d. will not recoup its upfront costs until 2018. implementation of the 2005 brac study was concluded on september 15, 2011 and took six years to execute. as we draw down from combat operations in the middle east and shift our focus from the middle east threat with emerging security issues in the asian pacific, additional rounds of brac cannot be justified. after 10 years of war and a substantial 2005 brac round, we
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now have a well-trained, battle-tested, efficient, stream-lined all-volunteer force that is more joint than ever. this is simply not the time for an additional brac round. thank you, mr. chairman. the chair: the gentleman yields back the balance of his time. for what purpose does the gentleman from florida rise? mr. young: i rise to support the amendment. the chair: the gentleman is recognized for five minutes. mr. young: i do rise to support the amendment. and i want to associate myself with the remarks of mr. wittman. he is right on. and i just want to emphasize how strongly i agree with what he has to say and i strongly support this amendment. the chair: the gentleman yields back the balance of his time. the question is on the amendment offered by the gentleman from virginia. those in favor say aye. those opposed, no. in the opinion of the chair, the
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ayes have it. the amendment is adopted. for what purpose does the gentleman from -- the gentlelady from california rise? ms. woolsey: mr. chairman, i have an amendment did he desk. the chair: will the gentlelady specify the amendment? ms. woolsey: 043, woolsey. the chair: the clerk will report the amendment. ms. woolsey: 043. the chair: could the gentlelady -- i have another one if you rather i do that. you don't have it? the chair: we do not have a copy at the desk. would the gentlelady submit a copy to the desk. ms. woolsey: i have many. mr. chairman, i have an amendment at the desk. the chair: will the gentlelady designate the amendment.
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ms. woolsey: 037. the clerk: amendment offered by ms. woolsey of california, at the end of the bill before the short title, insert the following, section, the total amount of appropriations made available by this act is hereby reduced by $1.7 billion. ms. woolsey: a few months ago, the republican majority passed their budget blueprint called for the complete elimination over 10 years' time of funding of the social services block grant. this program is designed to help people in desperate straits, people who have fallen on hard times, people who need a hand from their government in their hour of need. but the majority said, sorry, we can't afford that. the country, as they say, just can't afford day care for children and adults, special services for people with
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disabilities, substance abuse assistance, low-income housing, home-delivered meals, employment services and other support that people need when they have fallen on hard times. and what people need when they're working very hard to become self-sufficient. that kind of compassion is too expensive, apparently. but this week, when we are deciding how much to spend on our war machines and our department of defense bureaucracy, the sky's the limit. money is no object. well, those aren't the values i was taught. that's not the kind of country i want to live in. the pentagon has received more than its fair share of taxpayer dollars over the years. and frankly, they haven't always been the most careful stewards of the people's money. and haven't had the best accountability and oversight. haven't delivered the best bang for the bulk, mr. chairman. recent polling indicates that
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americans overwhelming want defense cuts, but instead we have a defense spending bill that is larger than last year's and larger than what the president requested. i say it's time that the pentagon contributes its fair share. my amendment calls for a $1.7 billion cut to the defense appropriations, an amount equal to the cut we have asked of the social services block granlt program of next year. if you believe that are human dignity and basic compassion are more important than throwing more money at wasteful weapons, then i hope you will support my amendment. i yield back. the chair: the gentlelady yields back. for what purpose does the gentleman from florida rise? mr. young: i move to strike the last word. the chair: the gentleman is recognized for five minutes. mr. young: mr. chairman, i want to compliment the gentlelady. she is certainly determined.
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this is the third or fourth amendment on the same subject just by changing the numbers. i'm not going to make the same arguments about the threats and about the need to defend our country, because you have heard that many, many times. but it is serious. it is serious. and the numbers keep changing. i don't know why they keep changing, but the fact that they keep changing indicates to me there is not really a real determination here on the number, but there is a determination on my side and from my view point, and that is a threat cannot be ignored. the threat is growing. and this is not a good amendment. and i ask that our members oppose it. i yield back. the chair: the gentleman yields back the balance of his time. the question is on the amendment offered by the gentlelady from california. those in favor say aye. those opposed, no. in the opinion of the chair, the noes have it. ms. woolsey: mr. chairman, i ask for a recorded vote.
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the chair: the gentlelady requests a recorded vote. pursuant to clause 6, rule 18, further proceedings on the amendment offered by the gentlelady from california will be postponed. for what purpose does the gentleman from texas rise? >> i have an amendment at the desk. the chair: the clerk will report the amendment. will the gentleman specify his amendment. mr. poe: cutting support to 650 -- $650 million under title nine. the chair: the clerk will report. the clerk: amendment offered by mr. poe of texas, at the end of the bill before the short title insert the following, section, the amounts otherwise provided in title 9 of this act are revised by reducing the amount available for operation and maintenance and defense-wide to reimburse countries for support by $650 million respectively.
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the chair: the gentleman from texas is recognized for five minutes. mr. poe: i thank the chair and thank the chairman and his staff for especially working with me on this amendment, which i would like to associate my previous remarks in a previous amendment on pakistan to this amendment. and it basically -- the intent is to cut half of the money that goes to pakistan under title 9 in this legislation. and i yield back. mr. young: would the gentleman yield? mr. poe: i yield. mr. young: i thank the gentleman for working with us as we discussed earlier during our debate that we would work together to find a solution that would be acceptable. you have done that and i congratulate you and i support your amendment. mr. poe: i yield back the balance of my time. the chair: the gentleman yields back the balance of his time. the question is on the amendment offered by the gentleman from texas. those in favor say aye. those opposed, no. in the opinion of the chair, the
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ayes have it and the amendment is adopted. for what purpose does the gentleman from iowa rise? >> i rise to strike the last word for the purpose of engaging in a colloquy with chairman young. the chair: the gentleman is recognized for five minutes. >> as you well know, 40 countries provide sustained coverage for our ground troops and they provide protection for our troops in afghanistan. mr. loebsack: and facilities in florida and wisconsin and several other states. in iowa, 75 employees work on a production line to load, assemble and pass the ammunition. this state of the art equipment allows this work to be done safely at a high quality rate and in a cost effective way for the taxpayers and the army. the army's budget requested required funding levels,
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necessary to sustain our capability and the highly skilled work force needed to produce them. a reduction in funding could result in a break in work that would result in lost capabilities, lost jobs and delays and quality concerns when the line is restarted. mr. chairman, i know we share a commitment to maintaining the work force capabilities and lines that produce the 40-millimiter ammunition and i appreciate your work with me over the last several weeks. i look forward to continuing to work with you to address this matter going forward so we can enher the time 2013 defense bill and supports the 40-millimeter work force and supply chain and i appreciate the cooperation and i yield back. mr. young: i thank the gentleman for his work on this important issue. the gentleman's correct. our nation's ability to pluse produce the 40-millimeter
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ammunition is a critical issue. i appreciate the states to support production of this ammunition. this is a matter of importance of readiness to the army and readiness of our armed forces is a matter of top priority to me and matter of great importance to both of our districts. i'm committed to ensuring that the funding necessary for the production of the 40-millimeter ammunition is available and that the supply chain and work force associated with the 40-millimeter ammunition remains strong. and i look forward to working with the gentleman from iowa reflects that priority. mr. loebsack: i yield back. the chair: the gentleman yields back. for what purpose does the gentleman from california rise? >> i have an amendment at the desk. the chair: the clerk will report the amendment.
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will the gentleman submit a copy of the amendment to the desk. >> here we are right here. the chair: the clerk will report the amendment. the clerk: amendment offered by mr. bilbray of california. at the end of the bill, before the short title, add the following new section, section, none of the funds many made available by this act may be used to remove any portion of the amount sold at veterans memorial in california. the chair: the gentleman is recognized for five minutes. mr. bilbray: it's a simple
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amendment, it says you will not use funds to tear down the war memorial on mount soledad. it's very simple, it's a war memorial that was originally built in honor of the veterans of korea. mr. chairman, a lot of the young teenager -- i remember my father, as we drove up the coast, he'd point at the moe moirl and say, that's the only war memorial to korea. at the time i believed him and i believe hat the time it was. since then it's been surround by 3,000 plaques. many show stars of davidsmark show crescents and many show crosses. but there are those that have taken offense to the fact that this war memorial happened to be across the universal sign of memorial. all i have to say is if we don't support this amendment not to tear down this one
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memorial i ask this body to be serious about the fact that in the united states we have over four million crosses as memorials in this country. we have over 455,000 emblems that may be interpreted any way you want. we have 40,000 star of davids as memorials on veteran property. in fact, in norman di, england, mexico city, and panama, we have 140,000 crosses or other symbols that might be projected as being religious. sadly, what we've got going on in san diego, it's those who claim in the name of religious tolerance, want to destroy our war memorials, if anyone takes offense to this, all this does, we're -- all this says, we're not going to tear down the four million crosses on the veterans' memorials across the
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country and we're not going to tear down or use any funds from this budget to tear down the war memorial that stands on top of mount soledad at la jolla, san diego, california. i hope my colleagues can say in the spirit of tolerance, no one needs to go out and be so intolerant as to tear down war memorials because somebody may claim it may have a religious connotation. god knows, we don't want to start tearing down the four million crosses that exist today or those thousands of star of davids that proudly sit today on veterans and federal property. >> will the gentleman yield? mr. bilbray: yes. mr. free ling -- mr. young: we support your amendment. mr. bilbray: thank you and i appreciate the minority's support of the amendment.
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i yield back. the chair: the question is on the motion of the gentleman from california. those in favor say aye. those opposed, no. for what purpose does the gentlelady rise? ms. lee: i have an amendment at the desk. the chair: will the gentlelady specify the amendment? ms. lee: it's amendment 142-lee. the chair: the clerk will report. the clerk: amendment offered by ms. lee of california. at the end of the bill, before the short title, insert the following, section, a, except as provided in subsection b, appropriations made in title 9:00 of this act -- in title 9 of this act are hereby reduced in the amount of $43,483,000. ms. lee: can i ask unanimous consent that the amendment be considered as read and printed in the record? the chair: is there objection? so ordered. ms. lee: once again, this is very straightforward, it reduces the contingency
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overseas operations account by $21 billion that leaves $64 billion in reserve, more than enough funds for the safe and swift withdrawal of troops from afghanistan. this amendment allows congress the opportunity to stand with the world-weary american people who want to bring our troops home. it is clear the american people have been far ahead of congress in supporting an end to the war in afghanistan. the call has been growing across this land to bring this war to an end and it is pastime for the congress to answer that call here today. i want to thank all of the co-sponsors of the bipartisan amendment and all of our colleagues who have worked on this issue throughout the year and supported my legislation, h.r. 780, to respondably end the war in afghanistan. our brave troops have done everything that was asked of them and more. asking our troops to remain in afghanistan for another two years when there is no indication the sirblings on the
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ground will change is unconscionable. as we send our men and women in uniform back into danger on multiple tours, they are bearing an overwhelming and unfair burden of sacrifice while so many of us go on with our daily lives. an alarming number of troops are coming back home with post-traumatic stress disorder, suicide cases are rampant and sadly each day we continue to hear more and more about our veterans and the terrible toll this has taken on their lives. mr. chairman, the cost of this war -- the cost of this war are sun epable, particularly when ke we ask what the added benefits are of keeping our troops in afghanistan through 2014. the war in afghanistan has taken the lives of over 2,000 soldiers and injured tens of thousands more and drained our treasury of over $500 billion. those costs will only go up as we spend trillions of dollars
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on long-term care for our veterans which of course we must and we should do. instead of spending over $ 5 billion in afghanistan this next year, we should restrict funding for the safe and responsible withdrawal of all of our troops and use the tens of billions of dollars in savings right here at home, investing in jobs and education and health care and mental health care. the situation on the ground in afghanistan, whether we fleeve to 13, 2014, or 2020, whether 100 more united states troops die or 1,000, let me just say, not an extra dollar should be spent extending the decade-long war in afghanistan. we have the power of the purse strings in this house. for those who believe that enough is enough, they should vote for this amendment. as the daughter of a mill tafere -- military veteran, i know firsthand the sacrifices and commitment involved with
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defending our nation but the truth is, our troops have been put in an impossible situation, there is no military solution, and it's pastime to end the war and bring our troops home. quite frankly, it's time to use these tax dollars from ending the war to create jobs here at home and economic security for the american people. it's time to rebuild america and also to provide for health care and of course as i said earlier the economic security of our troops. today, once again, we have the opportunity to stand with seven out of 10 americans who oppose the war in afghanistan. the american people have made it clear that the war is no longer worth fighting and i'll say it again, not an extra day, not an extra dollar should be spent extending the decade-long war in afghanistan. i knew 10 years ago that this would be a war without end. i could not support it then, more members of congress are beginning to see that this was a blank check to wage war
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forever unless we end it now. so after 11 years, yes, we should bring our troops home and we could do that responsibly by voting yes on the lee amendment today. i yield back the balance of my time. the chair: the gentlelady yields back. for what purpose does the gentleman from florida rise in mr. young: mr. chairman, i move to strike the last word. the chair: the gentleman is recognized for five minutes. mr. young: mr. chairman, in working with the administration , the department of defense, and our commanders in the field in afghanistan, we have come to a proper amount to be funded for this purpose. it's already included in this bill. i think to change the formula now from one that has been agreed upon by the administration, the defense department, and the commanders in the field who have the responsibility for operating this entire afghan operation, i just oppose this amendment.
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i think it's the wrong thing to do, it's very balanced, it's agreed to by the parties that have the responsibility, and i just hope the members will vote no. i yield back. the chair: the gentleman yield back. for what purpose does the gentlelady from california rise? ms. woolsey: i move to strike the last word. the chair: the gentlelady is recognized for five minutes. ms. woolsey: mr. chairman, i'm proud to co-sponsor the amendment offered by my friend from california. if approved, this amendment would accomplish two goals. one, to end this war and two, to save the taxpayers $21 billion. something i think both sides of the aisle could agree on. let's be clear about what this amendment does. it fully funds a safe and responsible redeployment of our troops from afghanistan. it's not cut and run. it's funding redeployment. the afghan people do not want us there. the american people don't want
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us there. yet we are spending $10 billion a month for a decade-long war that's failing to advance our national security objectives. why do we want to continue down this road, especially at such a great cost in blood and treasure. -- in blood and treasure? more than 2,000 service members have been kill and $54 billion in taxpayer money has been spent. this amendment provides sufficient funding to ensure that every man and woman in uniform leaves afghanistan safely. at that point, we can look away from defense spending to a national security policy based on the other two d's, diplomacy and development. we can turn away from military force and toward smart security, an agenda that keeps america safe by alleviating human need and investing in human capital in afghanistan and around the developing world. since 2004, mr. chairman, i
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have come to the house floor 437 times during special orders to call for an end to the wars in afghanistan and iraq. since i'm retiring at the end of this term, this will be my last debate and last vote on defense spending. i hope it can be my legacy and yours to finally reorder our national security priorities and put an end to the war in afghanistan. we owe it to the next generation and we owe it to americans in afghan stan -- americans and afghanis together. let's bring our troops home in a safe and responsible way. let's vote yes on congresswoman lee's amendment. i yield back. the chair: the gentlelady yields back. the question is on the amendment offered by the gentlelady from california. those in favor say aye. those opposed, no. in the opinion of the chair, the noes visit. ms. lee: i ask for a recorded
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vote. the chair: pursuant to clause 6 of rule 18, further proceedings on the amendment offered by the gentlelady from california will be postponed. for what purpose does the gentleman from iowa rise? >> i have an amendment at the desk, mr. chairman. the chair: the clerk will report the amendment. the clerk: amendment offered by mr. king of iowa. at the end of the bill, before the short title, add the following new section, section, none of the funds made available in this act may be used to administer the wage rate requirements -- mr. king: i ask that the reading be dispensed with. the chair: is there objection? there is objection. the clerk will continue. the clerk: of chapter 40 of united states code with respect to funding provided by this act. the chair: the gentleman from iowa is recognized for five minutes. mr. king: this is the davis-bacon amendment that i believe most members of congress have seen that applies
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to this appropriations bill. we have an existing code, the davis-bacon act. it requires that any construction projects that have federal dollars in them, $2,000 or more, be constructed under what the bill says are prevailing wages. prevailing wages in 1931 might have been a legitimate evaluation. today it's a federally mandated union scale determined by a formerly smoke-filled room of people from the administrative side and construction side of the industry. i've spent my life in the construction business. i've been involved in the construction business since 1970. i've worked on all sides of this that i can imagine. i've been a recipient of davis-bacon wages, i've paid davis-bacon wages, and i've done a fair amount of reporting of those wages to the bureaucrats. this law is the last remaining jim crow law in the u.s. code. it was written to protect union workers in new york city from the southern african-americans
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who were brought up to do a federal building in that city back during the depression and in 1931, there was a senator, james davis of pennsylvania, and representative robert bay son of new york, long island, i might add, decided that they wanted to protect -- protect the unions in that locale. so they brought this legislation to congress and passed it. it has been -- it has long been union scale, not prevailing wage, and yes, merit shop employers have an opportunity to introduce those wages they actually pay, the earned wages they actually pay but in the end it's a formerly smoke-filled room, people deciding, it doesn't cost us anything if it raises our bottom line, we all put our margin on top of that we like to be able to out-compete the rest of the industry, for the opportunity to hire the workers that will receive the highest pay. this is irresponsible on the part of the congress that now we're finding ourselves nearly $16 trillion in national debt,
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we have a budget crunch like we've never seen, we've seen a president that's driven this national debt up about $1.33 trillion just in the last budget that the president offered, and we're looking at taxpayer that have had enough. we need a balanced budget amendment to the united states constitution, we don't need irresponsible spend, we don't need wage protectionism. and by the way, the senator -- by the way, senator davis and representative bacon were both republicans, two of the more misguided republicans in the history of this country. i regret that i as an iowa-- yay -- as an i iowan have to stand here and say it's iowa president hoover that signed this bill. we believe in competition, we're a free and fair competition country who believe in free markets and i listen to the gentleman from massachusetts in the past who has said that any time you have two consenting adults that are conducting any activity that doesn't hurt anyone else, they
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should be able to do so without federal interference. if that's the case, tell me why i can't climb in the seat of my son's excavator and say, pay me $10 an hour, dave, that's enough, i need the therapy to get away from the insanity of this congress. i urge the adoption of this wage limit so we can build four -- so we can build five barracks not four, five bases not four, we can do five of everything instead of four if we just let competition set the wages, the quality will be there, the gentleman is about to tell you it's not, i will tell you i spent my life in this, we meet specification the high quality of the work is there. the other side of that is just an argument for union wage protectionism, we need to protect the taxpayers and the unions are fine, if they want to organize, i encourage them doing so, but they need to do so without federal protection,
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compete in the competitive world on lowed by like the rest of us where you have to -- on low bid like the rest of us where you have to meet the specifications to work. i urge adoption of this amendment and yield back the plans of my time. the chair: the gentleman yields back. for what purpose does the gentleman from washington rise? mr. dicks: i rise in strong opposition to the gentleman's amendment. the house has spoken on this repeatedly. there's a very substantial majority in favor of retaining davis-bacon and opposing the gentleman's amendment. some members continue to try to repeal davis-bacon despite the house record of supporting the protection on labor standards. i have been a long-time supporter of davis-bacon prevailing wage requirements. it helps ensure that local projects provide local jobs with affordable, middle class wages. the law protects the government from contractors trying to win federal contracts by bidding too low to attract competent workers. and we have seen time and time
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again where you have prevailing wages. the state of washington has its own prevailing wage standard in our state. and we find that on these projects you get better work and workers done at -- and work is done at a higher quality and so i again, i oppose this amendment and as i said, we have had several votes on this vote the yeas are year and every time it's been defeated. i hope that we would again defeat the king amendment. i yield back. the chair: the gentleman yields back. >> i move to strike the last word. the chair: the gentleman is recognized for five minutes. >> i appreciate the recognition. would want to join with the ranking member, mr. dicks, into my strong opposition to the gentleman's amendment. mr. visclosky: we had a similar debate during the consideration of the energy and water bill. one observation i would make is we do have a disparny this country and it continues to grow
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-- disparity in this country and it continues to grow despite how hard the average american works. and the problem today for that average american is that for one hour's worth of work it could be pushing paper -- work, it could be pushing paper, it could be waiting tables at a diner, it could be working at a steel mill, it could be laying brake brick, it could be a contractor, it could be a manager, it could be a c.e.o., it's less for one hour's worth of human labor in the united states today than it was in 1977 when i came to washington, d.c., on the congressional staff. that is not the country my parents left me and i think it is wrong to offer an amendment to further suppress the wages, hard -- wages hard working americans are trying to earn to make sure that they can buy a house, they can send their children to what are increasingly expensive public institutions because of the lack
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of state support for them, and who now hold retirement programs that are probably about 40% less in value than they were in 2007. this is a bad amendment and i strongly oppose it and i would yield back the balance of my time. the chair: the gentleman yields back the balance of his time. the question is on the amendment offered by the gentleman from iowa. those in favor say aye. those opposed, no. for what purpose does the gentlelady from california rise? >> i'd like to speak in opposition to this amendment. i move to strike the last word. the chair: the gentlelady is recognized for five minutes. ms. lee: thank you very much. let me just say that i rise in strong opposition to this amendment. some members here continue to try to repeal davis-bacon, despite the house being on record supporting the protection of labor standards. all of us, or at least the majority of us, have been in support of prevailing wage requirements. it helps to ensure that local projects that provide local jobs
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have these jobs that have affordable, middle class wages with benefits. the law protects government from contractors trying to win federal contracts by bidding too low to attract competent workers. this amendment should be opposed. if we really want people to move toward achieving middle class standards, if we want to keep the middle class with good jobs, good paying jobs with benefits, and there's no way we should repeal davis-bacon. people are losing the american dream quite quickly here in our own country. and here we go again trying to erode one of the basic protections of working men and women. so i hope we oppose this amendment, maintain standards of prevailing wage for our workers and ensure that they too have the opportunity to achieve the american dream. thank you and i yield the balance of my time. the chair: the gentlelady yields
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back the balance of her time. the question is on the amendment offered by the gentleman from iowa. those in favor say aye. those opposed, no. in the opinion of the chair, the noes have it. mr. king: mr. chairman. the chair: the gentleman from iowa. mr. king: i ask for a recorded vote. the chair: the gentleman ask qus a recorded vote. pursuant to clause 6 of rule 18 -- requests a recorded vote. pursuant to clause 6 of rule 18, further proceedings on the amendment offered by the gentleman from iowa will be postponed. pursuant to clause 6 of rule 18, proceedings will now resume on those amendmented on which further proceedings were -- amendments on which further proceedings were postponed in the following order. amendment number 4 by ms. mccollum of minnesota. amendment number 2 by mr. kingston. eamed the first amendment by mr. cohen of tennessee.
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amendment by mr. pompeo of kansas. amendment by mr. markey of massachusetts. an amendment by mr. amash of michigan. the second amendment by mr. cohen of tennessee. an amendment by mr. cicilline of rhode island. the first amendment by ms. woolsey of california. an amendment by mr. markey of massachusetts. the second amendment by ms. woolsey of california. the third amendment by ms. woolsey of california. the second amendment by ms. lee of california. an amendment by mr. king of iowa. the chair will reduce to two minutes the time for any electronic vote after the first series of votes. the unfinished business is the request for a recorded vote on amendment number 4 printed in the congressional record offered bibi the gentlewoman from minnesota, ms. mccollum, on which further proceedings were postponed and on which the noes prevailed by voice vote. the clerk will redesignate the amendment. the clerk: amendment number 4 printed in the congressal record offered by ms. mccollum of minnesota. the chair: a recorded vote has been requested. those in support of the request for a recorded vote will rise and be counted.
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a sufficient number having arisen, a recorded vote is ordered. members will record their votes by electronic device. this will be a 15-minute vote. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]
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the chair: on this vote the yeas are 166, the nays are 250 the amendment is not adopted. the unfinished business is the request for a recorded vote on amendment number 2 printed in the congressional record offered by the gentleman from georgia, mr. kingston, on which further proceedings were postponed and on which the noes prevailed by voice vote. the clerk will redesignate the amendment. the clerk: amendment number 2
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printed in the congressional record offered by mr. kingston of georgia. the chair: a recorded vote has been requested. those in support of the request for a recorded vote will rise and be counted. a sufficient number having arisen, a recorded vote is ordered. members will record their votes by electronic device. this will be a two-minute vote. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]
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the chair: on this vote the yeas
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are 202, the nays are 216. the amendment is not adopted. the unfinished business is the request for a recorded vote on the amendment from the gentleman from illinois, mr. quigley, on which further proceedings were postponed and the noes prevailed by voice vote. the clerk will redesignate the amendment. the clerk: amendment offered by mr. quigley of illinois. the chair: a recorded vote has been requested. those in support of the request for a recorded vote will rise and be counted. a sufficient number having arisen, a recorded vote is ordered. members will record their votes by electronic device. this will be a two-minute vote. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.] iment
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the chair: the yeas are --
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the chair: on this vote, the yeas are 60, the nays are 359. the amendment is not adopted. the unfinished business is request on the first recorded vote on mr. cohen on which the noes prevailed. the clerk will redesignate the amendment. the clerk: first amendment offered by mr. cohen of tennessee. the chair: a requestions for a
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recorded vote has been ordered. members will record their votes by electronic device. this is a two-minute vote. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]
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the chair: the yeas are 145, the nays are 273. the amendment is not adopted. the unfinished business is request for a recorded vote on the amendment offered by the gentleman from kansas on which further proceedings were postponed and the nays prevailed by voice vote. the clerk: amendment offered by mr. pompeo of kansas. the chair: a recorded vote has been requestionsed. those in favor of a recorded vote will rise and remain standing. a sufficient number having arisen, members will record their votes by electronic device. this is a two-minute vote. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives.
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any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]
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the chair: on this vote, the yeas are 137 and the nays are 282. the amendment is not adopted. the unfinished business is a request for a recorded vote on the first amendment offered by mr. markey on which the noes prevailed by voice vote. the clerk will redesignate the amendment. the clerk: first amendment offered by mr. markey of massachusetts. the chair: a recorded vote has been requested. those in support of a request for a recorded vote will rise. a sufficient number having arisen, a recorded vote is ordered. members will record their votes by electronic device. this is a two-minute vote. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]
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the chair: on this vote, the yeas are 150, the nays are 267 --
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the chair: on this vote, the yeas are 150, the nays are 268 the amendment is not adopted. unfinished business is the request a recorded vote by mr. a mash. the clerk will redesignate the amendment. the clerk: amendment offered by mr. amash of michigan. the chair: a recorded vote has been requested. those in support of a recorded vote will rise. a sufficient number having arisen, a recorded vote is ordered. members will record their votes by electronic device. this is a two-minute vote. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]
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the chair: on this vote the yeas are 166, the nays are 233, the amendment is not adopted. the unfinished business is the request for a recorded vote on
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-- the chair: the chair wishes to announce on the last vote the yeas are 186, the nays are 283, the amendment was not adopted. the unfinished business is the request for a recorded vote on the second amendment offered by the gentleman from tennessee, mr. cohen, on which further proceedings were postponed and on which the noes prevailed by voice vote. the clerk will redesignate the amendment. the clerk: second amendment offered by mr. cohen of
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tennessee. the chair: a recorded vote has been requested. those in support of the request for a recorded vote will rise and be counted. a sufficient number having arisen, a recorded vote is ordered. members will record their votes by electronic device. this will be a two-minute vote. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]
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the chair: on this vote the yeas are 228, the nays are 191. the amendment is adopted. the unfinished business is the request for a recorded vote on the amendment offered by the gentleman from rhode island, mr. cicilline, on which further proceedings were postponed and on which the noes prevailed by voice vote. the clerk will redesignate the amendment. the clerk: amendment offered by mr. cicilline of rhode island. the chair: a recorded vote hand about requested. those in support of the request for a recorded vote will rise and be counted. a sufficient number having arisen, a recorded vote is ordered. members will record their votes by electronic device. this will be a two-minute vote. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]
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the chair: on this vote the yeas are 147, the nays are 271. the chair: on this vote the yeas are 149, the nays are 2 0. the amendment is -- 270. the amendment is not adopted. the unfinished business is the
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request for a recorded vote on on the first amendment offered by the gentlewoman from california, ms. woolsey, on which further proceedings were postponed and the noes prevailed by voice vote. the clerk will redesignate the amendment. the clerk: first amendment offered by ms. woolsey of california. the chair: a recorded vote been requested. those in support of the request for a recorded vote will rise and be counted. a sufficient number having arisen, a recorded vote is ordered. members will record their votes by electronic device. this will be a two-minute vote. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]
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the chair: on this vote the yeas are 114 --
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the chair: on this vote the yeas are 114, the nays are 302, the amendment is not adopted. the unfinished business is the request for a recorded vote on the second amendment offered by the gentlewoman from -- the gentleman from massachusetts, mr. markey, on which further proceedings were postpone and the noes prevailed by voice vote. the clerk will redesignate the amendment. the clerk: second amendment offered by mr. markey of massachusetts. the chair: a recorded vote has been requested. those in support of the request for a recorded vote will rise and be counted. a sufficient number having arisen, a recorded vote is ordered. members will record their votes by electronic device. this will be a two-minute vote. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of
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representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]
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the chair: the yeas are 136 and the nays are 283, the amendment is not adopted. the request is for a recorded vote on the second amendment by ms. woolsey on which further proceedings were postponed and the clerk will redesignate the amendment. a recorded vote has been requested. those in support of a recorded vote will rise. a -- a sufficient number having arisen, a recorded vote is ordered. members will record their votes by electronic device. this is a two-minute vote.
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the chair: the yeas are 106 and the nays are 311. the request is on the third amendment vote by ms. woolsey on which the noes prevailed. the clerk will redesignate the amendment. the clerk: third amendment offered by ms. woolsey of california. the chair: a recorded vote has been requested. those in request of a recorded vote will rise. a recorded vote is ordered. members will record their votes
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by electronic device. this is a two-minute vote. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]
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the chair: the yeas are 91, the nays are 328, the amendment is not adopted. the unfinished business is request for a recorded vote on the second amendment by ms. lee on which the proceedings were postponed and the noes prevailed. the clerk: second amendment offered by ms. lee of california. the chair: those in support of a recorded vote will rise and remain standing. a sufficient number having arisen, a recorded vote is
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ordered. members will record their votes by electronic device. . this is a two-minute vote. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]
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the chair: on this vote, the yeas are 107, the nays are 312, the amendment is not adopted. unfinished business is request for a recorded vote on the amendment offered by mr. king on which the noes prevailed by voice vote. the clerk will redesignate the amendment. the clerk: amendment offered by mr. king of iowa. the chair: a recorded vote has been requested. those in support of a recorded vote will rise and remain
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standing. a sufficient number having arisen, a recorded vote is ordered. members will record their votes by electronic device. this is a two-minute vote. [captioning made possible by the national captioning institute, inc., in cooperation with the united states house of representatives. any use of the closed-captioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u.s. house of representatives.]
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the chair: on this vote the yeas are 182, the nays are 235. the amendment is not adopted. mr. young: mr. chairman, i move the committee do now rise. the chair: the question is on the motion that the committee rise. those in favor say aye. those opposed, no. in the opinion of the chair, the ayes have it much. the motion is adopted and accordingly the committee rises. the speaker pro tempore: mr. chairman. the chair: mr. speaker, the committee of the whole house on the state of the union having had under consideration h.r. 5856 directs me to report that it has come to nos remain title of the resolution thereon.
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the chair: the -- the speaker pro tempore: the chair of the committee has reported that the committee has had under consideration h.r. 5856, it has come no no resolution thereon. for what purpose does the gentlelady from florida rise? ms. ros-lehtinen: mr. speaker, i ask unanimous consent to be removed as a co-sponsor of h.con.res. 131. the speaker pro tempore: without objection. the chair lays before the house an enrolled bill. the clerk: h.r. 205, an act to amend the act titled, an act to authorize the leasing of restricted indian lance -- indian lands for residential, business and other purposes requiring the grant of long-term leases approved august 9, 1955, to provide for indian tribes to enter into certain leases without prior express approval from the secretary of the interior and for other purposes.
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the speaker pro tempore: the chair lays before the house a personal request. the clerk: leave of absence requested for ms. jackson lee of texas for today and july 17. the speaker pro tempore: without objection, the request is granted. for what purpose does the gentlelady from florida rise? ms. ros-lehtinen: -- >> mr. speaker, i -- ms. ros-lehtinen: mr. speaker, i move the house do now adjourn. the speaker pro tempore: the question is on the motion to adjourn. those in favor say aye. those opposed, no. the ayes have it. the motion is adopted. accordingly the house stands adjourned until 10:00 a.m. tomorr
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returns here on c-span. >> denied on c-span, the house armed services committee considers the affect on sequestration on the defense budget and unemployment. and the age of farmers and ranchers affected by drought conditions. later, an entity with the goldman sacks ceo. -- an interview with the goldman sacks ceo. military contractors warned of job layoffs due to automatic budget cuts known as sequestration. $110 billion of defense budget cuts are scheduled for the start of 2013. this is two hours and 15 minutes.
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>> good morning, ladies and gentlemen. the house armed services committee meets to receive testimony from our industry partners on the challenges of planning for sequestration. since we began this hearing, back in september of last year, we have held seven hearings and one briefing on sequestration. the bulk of which have delved into the impact of sequestration on our military capabilities and national defence. today we are holding our second hearing focused on the economic impact of sequestration. this time, focus on the implications for the defense industry base that enables and supports our war fighters. joining us today are mr. bob stephens, chairman and ceo of lockheed martin. mr. sean o'keefe, chairman and ceo of eads. david hess, and della williams,
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president and ceo of williams. i should note that mr. o'keefe also chairs the national defence industry association and mr. hess chairs the aerospace industries association. ms. williams is on the board of the national association of manufacturers. barring a new agreement between congress and the white house on deficit reduction, over $1 trillion in automatic cuts known as sequestration will take effect. although the house has passed a measure that would achieve the necessary deficit reduction to avoid sequestration for a year, the senate has yet to consider legislation. the president's budget submission which saw $1.20 trillion in alternative deficit- reduction through increased tax revenue was defeated in a bipartisan and bicameral manner.
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this impasse has created a chaotic and uncertain budget environment for industry and defense planners. while the cuts are scheduled for implementation, companies are required to assess and plan according to the law and sequestration is the law right now. we have all heard the growing number of estimates. secretary panetta has warned seek restoration would be catastrophic to our military and result in the loss of 1.5 billion jobs -- 1.5 million jobs and a 1% increase in the unemployment rate. this would send 200,000 men and women in uniform from the front line to the unemployment line. it would result in the smallest ground force since 1940. the smallest number of ships since 1915 and the smallest
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airforce in its history. the national association of manufacturers warned that dramatic cuts in defense spending under the budget control act of 2011 will have a significant negative impact on u.s. jobs and economic growth. the manufacturers forecast and one by dr. stephen fuller on behalf of the aerospace industries association has estimated private-sector job losses at over 1 million. faced with the process -- prospect of being forced to lay off four -- workers and give bad news to shareholders, industry leaders have been attempting to get more guidance from the administration. -- on how they will interpret and implement the law. to date, the guidance has been piecemeal. last fall, the pentagon stated that war funding would not be
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sequestered. then in may, the omb overruled and declared that while veterans' benefits would be exempt, funding for the troops on the front line with not be exempt. in june 2012, secretary panetta met with various defense industry's executives to discuss the impact of sequestration on their operations and to gauge the current state of the industry in general. in addition, press reports indicate that the director of the office of management and budget met separately with heads of several major defense companies. unfortunately, it does not sound like industry learned much from those meetings. reports indicate omb does not plan to issue implementation guidance until at least november, less than two months
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before sequestration is scuttle to take effect. my fear is that the guidance will come much too late. industry faces a host of planning canada's -- planning challenges. not the least of which is the act which requires most employers to provide notification at least 60 calendar days in advance of mass layoffs and plant closings. in some states, the requirement is 90 days. that means defense companies are currently grappling with whether to send tanks slips by november 3 to their employees. in addition, i worry that the cavernous silence from the president will lead many to exit the industry or to walk away from capital investments that are in the best interests of our
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troops. as i have said many times before, the men and women on the front lines have on our backs. who is going to have theirs if we allow the impending threat of sequestration to shutter the american industrial machine that enables them to fight, win and return home safely. this overdue guidance from the administration on how the -- on how they intend to interpret the law and implement sequester mechanically is critical to employers, not to mention congress. i look forward to our panel with the director of the omb on august 1. we all believe there is strong bipartisan agreement that sequester is bad policy and should be replaced. my hope is this hearing will
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provide additional incentives for the administration to provide more information to employers and for all parties to resolve this impasse. i look forward to your insights today. mr. smith. >> thank you, mr. chairman. i think our witnesses for being here to discuss this important subject and give their perspective on it. there -- i agree with the chairman that sequestration is not a good idea. it would be bad for our economy, bad for defunds -- bad for our defense. it is-across-the-board cuts in all discretionary spending -- education, transportation, infrastructure and on down the line. the part of the problem is the
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budget control act was not well drafted. i have heard dozens of different opinions about what it means and what exact effect it would have theory but is exempt, what is not and how it would implement it. nobody knows for sure until we actually do it. that is part of what the administration is wrestling with. i do not think there's any dispute that there is bad. i have not heard the white house disputes that. secateurs panetta has explained how awful sequestration would be. -- secretary panetta has explained how awful secret station would be. the burden of this house committee and house is to get rid of it one way or the other, to make sure it does not happen. if it happens, it will have a profound and negative impact. this is a problem right now. we tend to look at it and say sequestrating kicks in on january 1. but all of you and thousands of
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other employers are making decisions right now and based on what date reasonably project will happen in the next fiscal year. those decisions are leading people to hiring less people in some cases, laying them off in a petition -- thinking things will be cut off. we also have to look at what has gotten us into this. there seems to be an opinion that while this is a terrible thing and it is incompetence that is preventing us from dealing with it, it is not. it is more denial about the fiscal situation we are in. we are only here because of the refusal of the majority of people in the house to raise the debt ceiling. this deal was done at the all -- as the only way to raise the debt ceiling and stop the united states of america from defaulting on its obligations for the first time. it was only that blind notion that somehow not raising the
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debt ceiling was a solution to our fiscal problems that forced us into this awful decision. a decision which i did not support, mainly because it put all of the burden on the discretionary budget. we had a $1.20 trillion deficit. a 38% deficit that needs to be addressed. so far, we have put the burden on that on the backs of 38% of the budget which is the discretionary spending budget. we have refused to talk about revenue. the solution going forward double help us come up with the deficit control steps necessary to avoid sequestration -- admit that we are not balancing the budget anytime soon. we would love to have a balanced budget but there is not an economist out there that will not tell you doing that in the near term would be devastating to the economy. our role is to get those deficits under control but we
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cannot hold hostage steps that will do that to the notion that we have to have a balanced budget right now or even in the next three, four, five, six years. second, everything has to be on the table. we are going to need more revenue. we have cut taxes across the board. if we are truly committed to providing for the men and women who serve us and for our national security, we have to be willing to raise the revenue to pay for that. that is a critical piece of it. yes, we also have to look the other 62% of the budget. the mandatory spending and savings there as well. right now, there seems to be this desire for a balanced budget. also a desire to not raise revenue and not to cut any spending that is important. those numbers do not add up. i hope this committee can begin to be a part of the process of starting a realistic debate that
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can avoid the awful outcome that would come with sequestration and the awful outcome coming every day we delay making it clear that it will not do sequestration. i look forward to the testimony and the discussion. thank you. >> thank you, mr. smith. and thank you again, each of you for being here today. this is probably one of the most important hearings i can remember attending and we really appreciate your willingness to be here. mr. stevens, if you will begin, please. >> could morning. chairman mckeon, distinguished members of the committee, i thank you for this opportunity to i expressed our industry
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perspective on the impact of sequestration. i will submit a prepared statement for the record and offer a brief summary. >> no objections. that goes for each of you. >> thank you read as chairman and chief executive officer of lockheed martin, i am proud to represent 120,000 hard-working men and women who are the foundation of our business. we are a global security company operating in 50 states in 75 countries. our work force includes 61,000 scientists and engineers and 26,000 military veterans. our company consistently higher is the largest number of graduating engineers from u.s. universities compared to any other company. we receive more than 1 million resonates each year from -- resumes each year from people who want to help keep our nation safe and secure and ensure the united states lead the world. lockheed martin is the largest
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provider of information technology services to the federal government and we have a business presence in virtually every federal department or agency, including the social security administration,nih, the veterans administration and the federal aviation administration, to name a few. the men and women of our company play an important role in america's future and we all take that responsibility seriously. sequestration jeopardize is that future. from a national security perspective, defense secretary leon panetta has spoken in the strongest possible terms against sequestration. he said this process will have catastrophic consequences for our nation's defense and he described it as a meat ax. it is. the cuts were developed independent of any correlation with national security strategy , technology needs or operational reality. those cuts will be detrimental.
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from an industry perspective, our near-term horizon is completely obscured by fog of uncertainty. with just 167 days remaining until it takes effect, we have little insight as to how sequestration will be implemented and no insight into which programs will be curtailed, which sites will be closed, which technologies will be discontinued, which contracts will be reformed in which suppliers, particularly small businesses who are vital to our supply chain, will be shut down or severely crippled. most tragically, we fear people be unable to provide the equipment and support needed by our military forces and we are unable to reliably estimate how many employees will lose their jobs and how many families are going to be disrupted. it might be flattering to believe that our industry is so robust and durable that it could absorb the impact of sequestration without breaking stride but that is a fiction. the impact on our industry would
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be devastating, with a significant disruption in ongoing programs and initiatives leading to facility closures and personnel reductions that would disrupt a advanced manufacturing operations, road engineering expertise and accelerate a loss of skills and knowledge. it will undermine our aerospace and defense base which i believe is one of the crown jewels of the american economy and is vital to our country. beyond the fence, i think the broader consequences of sequestration also are not well understood. the abruptness and across-the- board nature of the cuts will hit hard virtually all domestic discretionary accounts as well. since most of our domestic departments and agencies do not have substantial capital acquisition accounts like the department of defense, that means the cuts will come from people through significant works for los and personnel reductions double byte the constrain agencies in providing
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essential support and services and filling their missions. sequestrating constitutes a blunt force trauma. it is likely to tear the fabric of our industry and affect our national security and -- i do not profess to have the with them or expertise to give counsel to this committee or the congress on the precise path forward to resolve the fiscal challenges our nation is facing but i have spent a decade of my professional working life in the national security arena and i have never been as concerned for the risk of the health of our industry and government enterprise. sequestration has been described many times to me as a doomsday device, a threat that was designed never to happen. but the effects of sequestration are being felt right now throughout our industry. every month it goes by without a solution is a month of on -- additional uncertainty, deferred investment, lost talent and increase costs.
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i urge you to take action to stop the sequestration process and ask that you do so soon. >> thank you, sir. >> i appreciate the opportunity to appear here today on behalf of the 90,000 members of the national defence industrial association which i served as chair. in addition to representing eads, the world's largest aerospace and defense company, i am particularly cursed by a memory of how this particular provision of public finance was first introduced into the federal process as a mechanism to enforcing some measure. when it was enacted in the mid- 1980s, it was intended to be indiscriminate.
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across the board by precisely the same amounts, the logic was 25 years ago, the method was a substitute for rational judgment. and choice of priorities. because the process had failed to reach consensus on what those priorities would be. therefore exacting a precise amount was enacted. the logic was also that this method was devoid of of any priority selection. nothing would be more affected and therefore there were no priorities. if everything is the same priority, there are no priorities. the logic was this resource management mechanism was so stupid that the threat of it would be a prompt all by itself
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to public leaders to avoid it at any cost. that was the logic. quaint as it sounds, 25 years ago. but it has been adopted a year ago as a mechanism now of enforcement following the debt limit extension provisions. that were then enacted to force this again. the consequences of this are serious. bob stephens has talked about efforts that would be applicable but the percentage that is to be applied while it ranges anywhere in the single digits to low double digits may sound like that will not be much of an impact. it masks the real consequence of this. the most severe is the administrative disruption that will likely cost almost as much as what this mechanism is
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designed to save. by however much is sequestered, taken across the board without priority or application, to any sense of its value in which contracts are valued at exactly the same value as cutting the grass at military bases, the consequence of that may sound exacting in its precision but the effort to implement it would be much more disruptive than anything else. it will force inefficiencies as it has in the past. that has been demonstrated and documented in terms of its extent. it is going to implement and enforce a number of contract penalties kabul terminate a variety of different programs -- there are some efforts to select with an the amounts that are identified by the program
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product in activity definitions. even those definitions are still in dispute an argument over how they will be applied. so that will extend this even further. the cost will certainly increase as there is a change in quantities by contract. the cost of capital for smaller second and third tier suppliers will almost certainly go up as financing expenses, just to meet the cash flow requirements as progress payments are disrupted. once that is settled, penalties will then be applied as well. bob stephens spoke to the act provisions that will be an across-the-board destructive effort. that has already started in some cases by notification to many of you and your colleagues as well
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as governors in 50 states. this provision may in fact have to be implemented. so it has already begun. the impact on second and third tier suppliers of which the national defence industrial association, most of its members represent, is going to be very significant. the disruption in that particular market is going to be one that may not sound like the percentage sound like a big deal. but just take for example suppliers to my company which does purchases, $15 billion worth of commercial and other activities in the united states every year. 70% of what we do is commercial, 30% is related to public contracts. yet many of the suppliers are much the same period for aerospace article that apply and
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in some cases, we do roughly 30% toward the commercial side of the equation. the cost of doing business for many of the second and third tier providers is going to go up significantly. some of those providers will elect to either exit one element of the market, defense and in particular, or public spending and as a consequence, the options for competition to maintain cost competitiveness is going to be much different. in the $15 billion a year that my company invests to purchase goods and services in the united states. some of those seven tier providers will exit the market and when they do, there will be less choice and the cost of doing business will go up. in the defense market, those same products cost in a public
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market at least on the order of 20% more to do business. those suppliers will exit the public defense market faster than any other. just to shed that 20% overhead that it costs to do business. as a consequence, it becomes an easy choice or one they are driven to in order to just survive. that is an opportunity to examine what that cost of doing business is uniquely to the public sector. if every article or most require roughly at the same comparability of its application in a commercial or defense context, why does it cost that much more just to sell to the public? that has an opportunity for re- examination. defense business board has
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advocated a regulatory holiday. during the 1990's, the administration refer to this as a precarious and holiday. -- precairment the same can be e cases in which 20% of the cost could be reexamined on a case by case basis. it demonstrates -- they have come up with it. creative -- they have come up with a very creative methods to do that. that is to looking at a mine last application of no priority, everything is a priority. that is an overhead that i would
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encourage as an opportunity to really look at what those expenses could be, to yield a lower cost and ultimately to accrue savings. maybe this is the most important element. while there will be -- a reduction in this area of domestic discretionary willpriations, it's resonate a different way. we are looking down and we have public servants for delivery of public services that require personnel and as a result, how the federal government goes about the process of determining how those reductions will be made is something you have to be heard from. while there may be a prospect of fewer tsa agents at the airport on any given day or disruptions as a consequence of the faa air-traffic controllers
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not been asked to report for duty that day -- there will be fewer research grants because be nih or the national science foundation is withholding the grant that was required for research activity. all of those are severe impacts. by comparison to the impact that will be on the armed forces in the u.s., men and women in service will voluntarily -- the impact will be profound on them and their families. it is worthy of consideration of what the consequence will be that is far greater than anything we are talking about this morning. >> are you close to -- > >> and done. i commend the committee for seeking resolution to this issue. i very much appreciate the opportunity to testify. thank you.
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>> thank you. >> -- is your mic on? get it close. >> i appreciate the opportunity to testify before you today regarding this serious matter of the potential for sequestration and the implications it has to our defense industry. as you know, i wear two hats. one as the president of the $13 billion company that employs more than 36,000 employees worldwide and second as the chairman of the aerospace industry association, which represents 300 aerospace companies across the u.s., which collectively account for 90% of the revenues for the aerospace and defense industry. i commend the committee on assembling such a representative group of witnesses to provide diverse answers based on the different challenges faced by
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each of us in the coming months. the chairman of aia -- i have visited capitol hill to outline what we see with regard to sequestration, the potential to affect over 1 million highly skilled aerospace and defense related jobs. the campaign has been spreading throughout the country with grass-roots rallies, highlighting the importance of sequestration versus suffering its consequences. as an industry, we are already seeing the impact of potential sequestration budget cuts today. companies are limiting hiring and halting investments largely due to the uncertainty about sequestration cuts being applied. at our sister division, the leadership has already indicated that given this environment, if they had to choose between investing and internal dollars between commercial and defense programs, the witches commercial
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programs. because of the uncertainty in the defense budget. that is a fair amount of uncertainty in the commercial environment right now. equally concerned are the impacts of sequestration on the domestic side as it relates to homeland security, border security, aircraft control, tsa, and other agencies. the sequestration threats facing other government agencies contracts the work force and affects our ability to do business safely and effectively. in the near term, some clarity from the office of management and budget about house sequestration cuts would be implemented will be helpful in terms of avoiding some of these impacts. regardless of how the cuts are implemented, the consequences for the industry would be dire. the industrial base tax force has reported that sequestration results in the closure of production lines and layoffs of skilled workers.
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it reduces the ability to respond to the needs of the u.s. military. however, i am here to offer my view on how sequestration will affect us directly and share with you these are becoming a reality for us. we build jet engines for the commercial and military marketplace. as you know, our future military based market consists primarily of the 135 engine 40 f-35. we are proud of our engine chosen to power the next generation. these will not really add to our production business until 2016 or later. with the end of the production run this year and potentially the end of the production run for the engines for the c-17, the f 135 engine is our future for our military business. already the decline in defense
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spending is affecting the f-35 production ramp and our engine production. as you know, $487 billion in budget cuts are announced and that has pushed at 179 f-35 aircrafts between 2012 and 2020. original projections a few years ago have had as building over 100 f 135 engines per year. this year, we will build over 50. half of that number. next year, our f-135 will actually increase. if sequestration will take effect, that number would decline dramatically. it is not just new engine deliveries that are impacting it. spare parts are the key to keeping our manufacturing base. flight hours have been cut back in sequestration will result in further reductions. this undercuts demand for our spare parts and overhaul work.
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for my company, the scituate it poses a work force and supply based problem. as the f-22 program winds down, i am transitioning many of these workers to be f-135 protection. this is extremely difficult, getting the near-term production. with sequestration come it will be more difficult to retain those highly skilled employees. quite simply, my work force is aging. specialized and highly compensated. if and when we go back up, the curve is steep and will affect production quality and training, which adds time and cost. this is unique because from a production standpoint, a jet engine is a jet engine, whether it goes on a military aircraft or commercial aircraft. this allows us to absorb disruptions between -- better than small companies. for a short time, i might be
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able to move employees between military and commercial programs, assuming i have an increase in demand for the commercial area. i have to take a risk if there seems to be a reward at the end of the day. this is like putting a band-aid on a bullet wound. in terms of our supply route, they are struggling. many are small businesses, making specialized cars for military engines that simply cannot survive another production decline in disruption. we continue to hear from our suppliers that if further cuts take place, we would be forced to lay off employees. one large supplier says they do not believe that d.o.t. will produce the number of engines. this uncertainty makes us less willing to enter into long-term agreements and drives our cost up to date. if sequestration were to go into effect, no amount of juggling will preserve my work force or help me maintain our supply
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base. the step down in current production ramp for that 135 mean some people will lose their jobs. it means that reduced volumes for suppliers which means costs go up. it puts a good program in a very tenuous position, a program we cannot afford to lose. to reiterate, make no mistake, it is dangerous to the war fighter and for us as a business and our supply chain companies and for us as a nation. again, i appreciate your perseverance on this topic. and for your allowing me to be your today. thank you. >> thank you. >> thank you, mr. chairman. a ranking member smith and members of the committee. thank you for the opportunity to testify on sequestration implementation options and the effects on national defense industry perspectives.
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i am the president and ceo of william speier wrote in fort worth, texas. we design and manufacture innovative products including custom cables, connectors, adapters come up test equipment, and intelligent power management systems. our products that improve the safety, reduced aircraft downtime, boosted buying power of the defense and procurement dollar. we currently have 89 employees. they continue to amaze me every day. i have been here since day one. as a manufacturer, i very much appreciate your focus on defense industry and the impact at the cuts set to begin on january 1
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of 2013. well i wish i were here under better circumstances and the impending threats of these wholesale budget cuts, it is a deep concern to me. my goal today is to put a face and a name to what is rather cavalierly discussed in the press as sequestration. most people would associate defense cuts with a big defense contractor, which are represented by several of my colleagues here today. supporting every one of these large integrators on dozens of programs are thousands of tier 2 and your three suppliers. most are small and medium-size businesses who design and manufacture what seems like a small parts. moreover, the defense supply chain companies collectively employ millions of hard-working people who each support spouses and children and community.
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these cuts will not just impact a few companies. these cuts will slow down the supply chain and through the broader economy. they will impact companies like mine. they will threaten the jobs of thousands of skilled workers. in fact, at a report released last month by the national association of manufacturers concludes that by 2014, the cuts in defense spending enacted last year combined with the cuts set for january 1 of 2013 will result in the loss of more than 1 million jobs. increasing the unemployment rate almost 1%. just in texas alone, this meant than 100,000t more jobs. manufacturing is an engine of economic growth. why are we making decisions that will inevitably stall that
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engine? the budgetary issues, the federal government faces them. they are the same one that i deal with every day in my own business. analysts say the defense industry is faced with several choices. either exit the market, a double down on defense by buying your competitors, or whether the storm. at our company, we have chosen to invest in product development. these are major investments. we are committed to developing products that will meet the military requirements. i believe that this dedication to provide innovative progress helps to illustrate the potential impact sequestration will have on my business and
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many others. sequestration will create an exodus of talent and skills to other industries. we presently have almost 90 employees, including assemblers and engineers. experienced in mechanical, electrical, software, from where, hardware, and manufacturing. these jobs are in jeopardy. what is being billed as a stopgap budget fix it will have lasting effects on our defense capability for years to come. the switch will just not get flipped back on to reverse that trend. moreover, the deep personnel and program cuts will threaten our national security. indeed, the united states could lose our technological and strategic advantage and never get it back.
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in conclusion, i urge members of congress to go back and sharpen your pencils. sequestration is cosmetic surgery with a chainsaw. working together, we can solve this. we need to do it smartly and strategically. while keeping the economy moving and defending this great land. thank you very much for inviting me to appear before you to talk about this very important issue. i would be pleased to answer any of your questions. thank you. >> thank you. i think we on this committee all understand, more than perhaps the rest of the congress, how serious these will be on our military and of our industrial base that you have laid out.
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i have a series of questions that could be answered very briefly. i would agree to to do that so we get these things on the record, which will help us as we go for. based on your testimony, it seems to me that you believe that sequestration goes into effect on january 2 and there will be job losses. can you each confirm at this time that layoffs are reasonably foreseeable? >> yes. thank. >> yes. >> thank you very much. >> do you believe we are obligated by the spirit of the letter of the worker adjustment and retraining notification to give conditional notices to your employees as a result of sequestration? in advance of making a final determination regarding which specific employees will be let
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go? >> given the uncertainty today, yes, we do. i like that answer. you have a specific history regarding the helicopter that is very important. could you expand on that? >> we knew there would be layoffs at a particular site. we did not know which employees would be laid off. we did not issue notices at the time of that termination. we opted rather to do internal planning to see if we could replace the worker in another assignment either in that location or another location, look at dimensions of the business we might have to provide flexibility -- that process took 45 days. in the subsequent evaluation of
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the termination claims that is typical in a termination environment, we have an opinion from the defense contract audit agency that says we should have acted more timely and the costs associated with that 45 days may well not be allowable. they might be viewed in their draft opinion that our actions were unreasonable, that we waited an unreasonably long time. experiences like that inform us in an odd way of the compelling requirement to take timely action and not allow the ambiguity of the situation to accrue against the interests of the company, even though in that case, our preference was our judgment to act prudently. >> you are still on that position? >> yes, sir. it has not been concluded yet. >> thank you.
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>> i concur. i concur with your question and we will be compelled to do something in that regard. yes. >> we would certainly abide by the requirement. we have certain advantages in our business. 80% of this as -- is the fence. 25% of our business is defense. depending on what is happening in the other elements of business, we might have the potential to redeploy people. it is far from certain. when you were looking at budget cuts in the order of magnitude that sequestration would involve, certainly there would be scenarios where we would be looking at proportional headcount reductions. >> thank you. >> i do not believe we are
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covered because we are less than 100 employees. even if it does not change -- if we do not get some contracts soon and i do not see how we will be able to keep our employees -- the sequestration will cut drastically. >> thank you. barring additional guidance from the office of management and budget and the department of defense on the application of sequestration, do you believe that conditional notices will have to be issued this fall prior to january 2 to comply with the warn act? how many employees do you estimate will receive those conditional notices, and if you will not have to issue conditional notices this fall, what extenuating factors affect your decision? >> yes, sir. i think that we will be compelled to issue notices. there is an ongoing discussion
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about how many warn notices will need to be issued and exactly when. there is so much uncertainty in this environment. i think that will be a capstone sirmente that the committee wrestles in your deliberations but we do know several things. we do know that sequestration is the law. we do know that law takes effect january 2. we believe any reasonable modeling around the law will require significant reductions in force with double-digit reductions in the budget. in the past when we've had budget reductions we look internally at a strategic assessment of our company because if we cut the clock uniformerly it will be uneconomical and those costs will flow back in the future. that restructuring will likely mean we will have plant closings. plat closings and significant reductions in employees will trigger the warn act. the question becomes when. our best judgment, as we try to put pencil to paper with all this uncertainty about planning, is that agencies will
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actually move closer to january 2 because the act requires a $55 billion reduction in fiscal 2013, but the act takes effect after the first quarter. so the $55 billion has to be reduced over nine months, not a year. every year that's delayed after january 2 makes the magnitude of the reduction to accumulate $55 billion in the year more. if three more months go by, the equivalent of $110 billion would have to be taken out of the agency which would be more and more disruptive. so i think as people come to terms with their responsibilities in that sequestration is the law and we must prepare for it, there will be an impetus to move closer to january 2. we need to be prepared to enable agencies to make those determinations because of that preparedness of, we'll set back 60 days, or in the case of new york, 90 days from that. the question is which employees would be terminated. we don't really know. we'd have to broaden the notification under warn
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appropriately. we are very hungry for more guidance, very hungry for more information so we can nairy this and behave responsibly. >> and yet when we held one of our hearings in september and we asked the assistant secretary, dr. carter, what they were doing to prepare, his comment was rather flipant. we don't have to do anything to prepare. we just take the budget out, take the percentage off of every line item so it takes no manage. i just think that is totally irresponsible. mr. o'keefe. >> again, i think much as you heard from others here, absent any specific guidance on how this should be applied, we will be compelled, as a matter of compliance with the spirit of the law of following through on the warning act provisions.
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now, we've already begun that process. again, we've notified many members of congress that represent constituencies and districts in which we operate in as well as the governors of those states that this provision will have applicability. we're assessing at what point we have to make that determination. and much as you heard from bob stevens, we have to make that choice as we see the time unfold here absent any guidance that's going to have to be sooner or later. again, the determination from the office of management and budget and d.o.d. will prescribe that. but much what you heard as well from dave hess, 70% of what we do is commercial related. we are going to have options and alternatives, but there are going to be very specific contracts and programs that will be affected that are federal contracts across the board. and once we get those more specifically targeted, that will be focus and where the warn act applications will occur. >> thank you.
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mr. hess. >> we will certainly abide by the regulations of the warn act. as you heard from my colleagues, you know, given the amount of uncertainty in terms of how the budget reductions play out and also given the opportunity to maybe redeploy people to other parts of the business, it's not clear to us today that we would trip the threshold involving implementation of the warn act. with respect to conditional notification, we are still considering that possibility. >> thank you. >> i understand you're not affected by this, but please explain whether any of the exemptions to the 60-day notice of the warn act requirements are applicable in this situation. for example, could your company claim that layoffs results from sequestration were sudden, dramatic and unexpected? >> we don't believe so. >> no. they're well forecasted and
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anticipated. we're motz in advanceed and -- we're months in advanced and we see it coming. >> they say sequestration will occur on january 2. not contingent on anything. it's the law of the land and we're obligated to plan on it. >> even though some in the administration say it's not going to happen, don't worry about it, you feel you're bound by the law? >> we have a fiduciary responsibility to our board, to our shareholders and our employees to plan based on the laws in the books today. >> and aside from issuing notices to your current employees, how has the possibility of sequestration impacted your current hiring practices or that of your industry partners? >> well, sir, we slowed down on the i think very simple and logical premise that if we're going to engage in significant reductions in the work force in january, it's prudent to bring people on for six months. what struck me as more interesting and maybe more
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telling about the future, we recruit heavily on college campuses. we do get a million resumes a year from very talented young people, and i know you interact and members of the committee interact with these young people all the time and it gives you the optimism of the future of america when you have the ability to seele talent and -- see the talent expressed by these graduates. they started to ask whether they wanted to come into the industry or specifically with our company even though they love the technology and they love the mission because they question, if i join you now, will i have a job next year? these are very smart kids. we want them because they're smart young people and they're smart enough to realize this uncertainty could cause them to look at other options for their career. we want the best and brightent talent in the defense industry so we can continue to innovate the products and services that our women and men in the armed forces rely on to keep themselves safe.
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>> mr. chairman, i would say we've slowed down hiring as a consequence indirectly of sequestration. what's occurring now is requests for proposals, range of different contractual activities are all shifting to the right in the federal activity. it's all been delayed. so as a consequence of that, it refocuses your attention. we are not going to hire folks in anticipation of what we think is going to be market opportunities coming down the road that we think we can compete more successfully. we've slowed that down significantly. >> so even though you've been told that it's probably not going to happen, don't worry about it, the department is already slowing down in anticipation of it happening? >> absolutely. >> there is no question. >> thank you. mr. hess. >> clearly the threat of sequestration is tempering our decision today with respect to hiring and capital investments. quite honestly, we've seen companies in the past that have made decisions to invest and are suffering the consequences
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today, for example, in the joint strike fighter program. i mentioned the fact that the lines we're looking at, production volumes, are about half of what they were forecasted to be. companies that invested based on the prospects of a much higher volume are now struggling. in fact, some of them we have examples, small businesses like williams that have gone chapter 11 or chapter 7 because they can't support the cash flow. they made decisions based on forecast of growth. sequestration would only exacerbate that. >> ms. williams. >> i feel that i owe an obligation to my employees to explain this as well as i can to them so that -- i mean, they get very nervous about this word, sequestration. they are like, what does this mean? but i owe it to them so that they know what might be happening and whether they should go look for another job.
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and believe me, i don't want to lose those people because they're longtime employees, but this consumes about 50% of our business, a little over 50%. and i think my hands are going to be tied if all of this happens. >> thank you very much. mr. smith. >> thank you. first of all, just out of curiousity, have even of you been told, it's not going to happen, don't worry about it? >> in my case, sir, there's lots of discussion when we engage in a dialogue about what we should prepare for, and there are suggestions that a remedy will be developed. sure. i would say -- and i think your comments earlier certainly reflected this, sir, there are lots of opinions and there are lots of points of view, but we hold ourselves to a set of standards that i know you and the committee expect business
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leaders to hold themselves to. >> i understand that. further question. the chairman said a couple time the administration's position is it's not going to happen. >> we're preparing. >> don't think that's accurate. >> we are preparing. >> the administration is aware of the fact that this is the law and until we cheaning it it's potential. they don't want it to happen. nobody in this committee in this room wants it to happen. the problem isn't so much a matter of preparation. the problem is that the law is regrettably on the books, and coming, and we have to find a way to change it. and towards that end -- and i do have a question at the end of this -- but i think what we've learned here is that government spending kind of matters. you can't just blindly putt it and assume there's no problem which is sort of what led us to this horrible deal in the budget control act last time was, you don't raise the debt ceiling, it's no big deal. that will get us to a balanced budget. that will work. government spending matters. so does private sector. so does keeping taxes low. but we can't simply blindly say
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whatever you cut from government it will be fine because they are not really doing anything that important anyway. and it is that attitude that led us to where we're sitting here. the notion that you didn't have to raise the debt ceiling and then if you put in place mandatory cuts it really isn't that big of deal. so i hope that lesson will be learned. and as we go forward looking at our budget situation with $.3 trillion deficit, as i mentioned, even though tomorrow we say we won't do sequestration, i'm curious as you look at the next 10 years. a boom time for defense contractors, no matter what happens, sequestration or no sequestration, we've got pretty tight fiscal situation for the next 10 years. how are you looking at that? how are you anticipating the impact of simply the reality
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of, you know, revenue being in one place and spending being in another and the need to reconcile that and the reality that the defense budget right now is 20% of our budget? how are you planning for that over the next 10 years? >> the way we're focusing our business now is to accommodate the reductions already in the budget control act of $487 billion that defense secretary panetta has spoken about that's embedded in our national security strat he gee. -- strategy. a number of our programs have been capped, canceled. we slowed down our programs. our work force is 18% smaller today than it was three years ago. we're hitting the brakes there. we've taken out a million and a half square feet of facilities. we will take out another 2 million square feet by 2014. we cut our research and development. sizing the cloth of the business to meet the market reality. we're also looking to work with the administration and the leadership in the pentagon at international work because our nation has asked others to step up as security cooperation partners, as good security
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cooperation partners, if we have interoperable systems we could do well together. they burden share some of the expense, and any incremental work flowing into our businesses stabilizes our businesses, stabilizes the work force and it lowers the cost of every bit of equipment that the u.s. buys for u.s. purposes. so that's how we focus the strategy in the business. >> if i could, mr. o'keefe, maybe you could take a stab at this one. how worried are you, give given the budget reality, that that reduction number will go above the $487 billion that's currently projected? if i could piggyback on that projection. there are a number of studies coming out now that the pentagon's plans to, quote, reduce that spending over the course of the next 10 years, don't really quite add up. what they say get them savings doesn't. it will wind up costing them more than that. do you think it will be more than what's currently been talked about? >> it's certainly possible.
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if there are reductions we'll do the best we can to accommodate our business. ande done it historically we'll continue to do our very level best to size the business so that we can deliver against these commitments. i think the greater concern we have is that the resources that are available for national security alined with a strategy of -- aligned with a strategy. >> does anybody else want to comment on that? >> to pick up on the last point, it is yet to be mentioned. this is the first time we've seen in the course of better than 40 years in which every change and reduction in national security spending in that span of time has been precipitated by a change in strategy to accommodate or to recognize a different threat level. this hasn't happened in this case. this is purely exclusively driven by the financial
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realities of -- >> if i may -- >> yes, sir. >> we just took $175,000 troops out of iraq. we're drawing down afghanistan. there are national security changes that are precipitated. some of it the budget is part of it. there have been, you know, just like in those previous cases, changes in our national security needs based at least on iraq and afghanistan. >> there has been accommodation to that. i think you also suggest, as you have in your opening statements as well, that much of what we're seeing going forward here is going to be a consequence of the fiscal uncertainty and less about the threat. so it's very difficult. it's near impossible from where we sit to anticipate exactly what kind of market changes that will involve. and i think very realistically there are pearg back expect -- parring back expectation will look like. and what we are seeing is a gravitation towards second to third tier suppliers to those
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that are far more commercially oriented. >> it would help if the government have more revenue so it is not forced into as bad of a budget situation. would any of you disagree with that assessment? >> i think the choice of exactly what spending and revenue balance is is more dominantly of your portfolio. and so as a consequence, i'd defer the answer to that, sir. >> that is true. i yield back. thank you. >> thank you. mr. bartlett. >> thank you. 20 years ago i sat in the most junior seat on this committee and frequently frustrated particularly in important hearings like this that time was going to run out before i came up in the cue. sensitive to that frustration, i would like to yield my time to the most junior member of our committee here, that's mr. west.
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>> thank you, mr. bartlett and thank you, mr. chairman, and mr. ranking member. i'd like to try to get a little bit more specific. i'd like to know from each of you what are your four major weapon systems programs or developments that you have the most concerned being affected by sequestration and, of course, the corresponding work force concerns as well. so if you could give us that idea of kind of your top four. >> i want to be responsive to your question, sir. when you align the top four with sequestration, one of the challenges we have, our understanding of sequestration is across the board. >> irregardless of sequestration, what are the top four that you think will cause you concerns if they were affected by sequestration? >> undoubtedly the joint strike fighter program. undoubtedly programs in missile defense, and there's a portfolio associated with missile defense. without question programs like latoral combat ship, excelling combat capabilities.
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and then an array of classified or intelligence oriented programs. all of which, as we understand the environment, would not be immune so the support service we provided the intelligence community would be adversely impacted. >> how about work force impacts? >> our best estimate, which i admit, is sufficiently crude, i am a little embarrassed to offer it, 10,000 people, but we've done it at the back of the envelope where we've made up the assumption of 120,000 people, in the neighborhood of 10,000, that number could be more or less depending upon will there be accounts that will be excluded as the chairman and ranking member said. there is still yet information to be determined. we'll shape our outcome there. i think 10,000 across the board is about the best answer i could offer. thank you, sir. >> well, sir, the three i would highlight in particular are the first and foremost, the uh-72 lakota helicopter, the program
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that is frequently recognized by every audit service and the defense department overall as on time, on budget for over 225 aircraft thus far without any exception to that whatsoever. that could be compromised as the changes and production rates alter, that will almost certainly cost increase per unit and that will be the first time in the entire experience of that program that we would see a cost increase or a failure on delivery. i really would hate to see that record of absolute achievement compromised or blemished even for a moment. the second, as much as bob stevens described, is the combat ship. we have a lot of interest in the systems that are engaged there for radar and a variety of other activities all of which will turn on whether or not the number of vessels -- commission for production and contracted
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will be engaged. uncertainty for an for a period of time which therefore takes whole upets and defers them until there is time certainty. and the third is the united states coast guard. often recognized as a very strong support element of the defense establishment and national security overall, we produce most of their helicopters and a good number of their cargo aircraft. all of which by contract at this point have a prospect of being deferred given the very small maneuverability that this particular agency has for their capital accounts. we don't know what will be. so trying to estimate the number of peoples will be not impossible to figure out what would be involved here until we see what those exemptions are as well as which programs in specific may ultimately have to deal with that if they are all going to be applied across the
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board evenly. >> for pratt-whitney, we are seeing significant engine delivery reductions in our legacy engine programs. certainly our sole source engine on the f-22, now that program has been terminated, we are finishing up some spare engines. for the c-17 and f-16 where we deliver military engines, both of those program delivery rates are declining as well as they shift largely to international sales. we were counting on the ramp up and the increase in the joint strike fighter program that bob talked about with our sole source engine there to offset those declines and really kind of stabilize our operation and enable us to maintain our industrial base. as we see that program continue to be delayed, the last recuxes that support the $487 billion in reductions took on 187 airplanes out of the sky. so that impacted our delivery
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rates. and we were looking for the ramp up in the tanker program. but that doesn't start until 2016 and beyond. so joint strike fighter and tanker will be the most important programs for us. >> the weapon systems, test equipment that we manufacture for all aircraft that we do currently for f-16, f-15, f-18, the a-10 program and the f-35 and some on the f-22. but this concerns me because we go to the air force bases and recently we saw 1969 technology still being used. do you remember 1969? rabbit ears, transistors. >> i was only 8 years old. [laughter] >> the gentleman's time has expired. >> thank you, mr. chairman. my time has expired. >> thank you.
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mr. andrews. >> thank you, mr. chairman. thank you, ladies and gentlemen, for your testimony this morning. i agree with you completely that i favor repeal of the sequester as soon as we can possibly do it for many of the reasons you very well articulated here this morning. i also acknowledge the responsibility to understand the comments that admiral mullen gave us when he was chair of the joint chiefs of staff in which he recognized that a country that borrows 40% of its operating funds can no longer be a strong country. inevitably, the national debt is a national security issue. the way we got into this mess is that for five decades people on this side of the aisle and people on that side of the aisle have gone through the following exercise. whenever anybody brought up a
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reduction in spending, we had hearings about how bad that was and who it would hurt. and whenever anyone brought up an increase in revenues we had hearings about how bad that was and who it would hurt. so we made a series of decisions that you would never make in your fiduciary responsibilities. we made stovepipe decisions about those spending programs and those revenue increases in isolation. that's how you create a $17 trillion debt. how you get out of it is to do things that people do not like. i think most of you would agree that since nearly half of our budget -- i guess more than half of our budget is social security, medicare and medicaid, that we have to do something about restraining the growth of those programs in an equitable way. i agree. that's why i'm one of the fewer than three dozen people who voted for the simpson-bowles budget proposal, mr. cooper put on the house floor in march. it will stipulate that -- i
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think you would agree with that. let me ask another question. it's become an article of almost religious faith around here for some members that any revenue increase at any time on anyone should be taken off the table. who here agrees with that proposition? >> let me speak. i don't think you'll hear any of us here today arguing against the need for fiscal responsibility. we have jobs to do running the companies we run. i can look honestly at my colleagues here saying we're first and foremost americans. as possible talked about, we are all making decisions today to deal with the 10% budget reduction that's already been enacted and being planned on implemented now. we're making decisions in terms of head count reductions. we're right sizing our companies. we're closing facilities, consolidating our footprint, making the tough decisions and taking the tough actions to deal with the need for fiscal responsibility. we i think are supportive of that and understand that. >> mr. hess, if i may, the
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specific question i asked was, who here would advise the congress to rule out under all circumstances any revenue increase on anyone at anytime? would any of you make that recommendation to us? think say that i don't any of us are sitting here today presuming that we have the wisdom to recommend a solution here. >> no. i don't think it's a matter of wisdom. i think you have a lot of wisdom. do you have an opinion? you are an american citizen. you are the leader of a major institution. do you or do you not think it's wise for congress to rule out all revenues on all people at all times forever. do you think that's a wise congress, -- thing for congress? >> i think you have to put everything on the table. >> i know when we face challenges in our business -- and i don't intend to imply that the challenges that we face come close to the magnitude of
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the challenges you face on this committee or that congress faces. it makes ours look pale. we try to put in the recipe every possible ingredient that might lend itself to the formation, not just of a solution but in a perfect world a flexible array solution, comprehensive, thorough that allows us the flexibility to run the business. philosophically i think you'lly that in our actions. i think we're held accountable from our board and our shareholders, i think our employees expect it. >> i appreciate that. since my time has run out, i'll give you this context. social security was truly imperiled in the early 1980's and a president named ronald reagan and stepped forward and
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on two occasions agreed to raise more revenue for us. the reason that social security still exists today. and i think our friends on the other side would be wise to follow president reagan's example in this time of emergency. i yield back. >> all that we had president reagan. [laughter] >> mr. chairman, i want to first thank you not just for holding this hearing, for being across the country alerting the public to the dangers of sequestration long before anybody else was doing it. and also for actually putting the solution on the table. we're not going to change this by press conferences. unfortunately, the house, as you mentioned, has passed a solution. second thing i have to do is take issue with something the ranking member said at the beginning because i just believe it to be blatantly inaccurate. we did not get here because the majority of members of the house of representatives or majority of individuals across the country realize the insanity of continuing to allow an irresponsible and uncontrolled
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massive increase in the smothering debt our nation is mounting. we got here very easily. picture's worth a thousand words. if you look -- joe, if you could hold that one up for me. this administration decided they would spend $825 billion on a stimulus package. $347 billion of interest. if you look at these charts, if they look identical, it is identical, because what actually happened is they decided to spend in one year on a stimulus package almost the entire amount they are now taking out of defense for 10 years. and even though this package has no measurable significant increase in jobs, we know this is going to cost us between 1.5 million and two million jobs. it's important to know how we got here.
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but we are not the ways and means committee. we are not here to talk about tax increases. we are not even a jobs creation committee. what we're here for is looking at the national defense of this country and that's what you guys do and you do it very, very well. my big concern as i go back to the 1990's and look at all the cuts in a are taking place, and i am concerned about the $487 billion that we have already taken much less the $1 trillion that's coming, my understanding is we started that decade with 50 major defense firms and we ended up with six prime contractors. we started that decade and at the end of it we had our major surface combatant shipbuilders and our fixed wing developers fell from six to three. our tactical missile producers fell from 13 to three. and the number of tract combat developers fell from three to two. today there are just two companies, boeing and lockheed martin, that build fighter aircraft. my question for you is what
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impact do you think sequestration may have that might be similar to the 1990's in terms of weeding out our industrial base and the impact it may have on that over a long-term period of time? >> yes, sir. having lived through the 1990's, i think the consolidation that you described was an effort to size supply for the likely demand that has to equalibreate somehow. another round of reductions on the demand side of this will -- should we try another? there has to be a healthy relationship between the demand for the products and services that we have and our ability to supply them. so the supply chain in some form or fashion will either be
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graceful and focused and have a good architecture or it won't be, but it will size and shape itself differently to meet the level of demand that exists. >> i think that the shakeout in the market we're seeing right now in the second and third tier of suppliers is already a manifestation of that point. we're seeing either companies consolidate, be bought by larger primes as we've seen in the last few years or simply exited the public market. and have consolidated much more towards the vague reasons some of the commercial trends that occur but at the same time much more reliable than we're seeing as forecasted over the next decade in the public spending market. i think that's already occurring. it's happening right now. >> i guess i would have to agree with you. i think we're getting to have a very critical point. it's not the big companies you referenced. people like lockheed martin and boeing. where we see a greater concern
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is with the smaller companies such as represented by ms. williams today. that down to one company may has a unique skit set or technology -- skill set or technology that they're consider exiting the business. otherl go pursue or market. that's quite honestly where we're really starting to see some concern. >> excuse me. i would agree with the gentleman here that this is going to affect us greatly. >> mr. chairman, thank you, and i yield back. >> thank you very much. mrs. davis. >> thank you, mr. chairman, and thank you all for being here. i just want to say as someone representing san diego that i want to thank you for your work on behalf of your employees and certainly their families. and i really relate to what you're saying about people being affected, but as we know it is not just in the defense industry that we see tremendous affect on families today, uncertainty and
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i know that you have to be concerned about that. how young people are educated today is critically important to our national security and so that's a concern as well. i want to just identify myself with some of the comments and questions of my colleague, mr. andrews, because i think we do want to see this in a balanced way and i call upon you and i hope that you are considering that you obviously need to be very strong advocates which you are for the industry that you represent. but i would hope you would extend that as we work into these very, very difficult issues that we're facing. i wonder if i could count on you to do that to include those kind of comments as well and the need to balance out and put everything on the table as you suggested. >> i'd be happy to do that. >> thank you. what i want to ask you about, let's be strategic about this. i don't support sequestration. as we said, nobody here does in those kind of across-the-board
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cuts. in reality is you had to deal with cuts and different ways of really analyzing the work that you do within the budget control act and some of that extends to additional changes that may be made in the industry. and are you in a position today to suggest to us, are there reforms in contracting that you think is critically important to make? we think multiyear contracts, perhaps that could spread out some of the sacrifices, if you will, that might be made in terms of looking at the strategy that is put in place, the targeted kind of cuts. and i know, ms. williams, you spoke about that as well. what is it that we should and could be looking at? i don't want to say next generation of reform. something you talk about but we don't acknowledge as part of this whole discussion. >> thank you.
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i'll try first, ma'am. i will say this probably won't sound inventive or innovative in any way. it's interesting about acquisition reform, the fundamentals that seem to keep resurfacing are the same observations we have across the industry. i tell you first is stability. whether that stability is the funding environment or the requirements environment or industry's ability to hire, train, get the right people in the right place at the right time, do those fundamentals, those fundamentals drive this process substantially. secondly, if we could look at shortening the cycle times, cycle times in the industry are getting longer and longer and longer from the formation of a proposal, the early test phases, it's getting longer and time is money. anything we can do to streamline, simplify and shorten that process certainly would accrue to a portfolio of efficiency initiatives that i think would result in good savings. >> i'd simply offer the recommendations of the defense
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business board that reports to the secretary of defense, take them up on their suggestion. what they're proposing is simply suspend regulatory environment in which every regulation then has to justify the reasons for its application as is being sought to be applied. otherwise, dispense with it. that is an approach that will sort out this question, not our recommendations, one that the business board made to the secretary of defense in that regard, that's not an unreasonable proposition. it is a documented proposition that costs precisely the same articles, at least 20% more to sell to the public than it does in any other commercial activity. so sorting out what causes that 20% is one manner that the defense business board has recommended. i'd take them up on their suggestion and do it. >> what do you think keeps us from doing that now?
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>> i don't know. resolve, commitment, suggestion, whatever. it was just been put forward but it's one that would be worthy i think of inquiring -- and ofof d budget. what is aaron to with the logic that this group has recommended to be implemented, which does not disband -- this justifies what it needs to be there, or it is dismissed? it is a fairly reasonable proposition. one would love to contribute because of the additional cost of doing business. >> thank you, mr. chairman. >> the thank you. they have led three times in the house. we voted to address sequestration, but sadly, the
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president has threatened to veto. the senate has not taken up the legislation, but the more the american people learn, i want to thank all of you for bringing this up. also, i am grateful. a state near and dear to me. it is virginia. my brother was born in richmond. i am very proud graduate of washington and lee, and i have a son who is active duty navy. it is very revealing, particularly in northern virginia, as you look at the consequence of defense spending, it is not just northern virginia. this includes mclean, sterling, arlington, falls church, alexandria, fort belvoir,
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quantico. each won over $1 billion. it would be such a state affected, jobs, military families, they are put at risk. as we approach this, it has already been addressed, but there has been some confusion about the warren act. the notices, 60 days, 90 days, what is it with a minimum of 60 days. when would a person anticipate to receive the notice of layoffs, if you could give your point of view? >> i am certainly no attorney or warren at specialists, but i have been around some that think they are, particularly as you look at sequestration. this is with timely notification. this is october or early november. new york is a 90-day notification state. i think we set this back in time, and it would be the end of
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september, early october. >> again, we've already begun to notify members of congress who represent districts in which we operate and do business as well as governors of those respected states that we may be compelled to do this once we in the absence of guidance from the office of management and dg or the defense department. now, that will have to occur sometime prior to that 60-day notification stage. and exactly when is going to be very much contract dependent depending on what advice or guidance we receive from the administration. defined the requirements of the warn act and, again, we're -- of the warren act, and, ag ain, we are certainly prepared to comply with the law. again, given the uncertainty in
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how sequestration will play out, it's not clear to us that u.t.c. we'd trigger the warn act -- the warren act concern that we have. >> as i said earlier, i don't think this applies to me because i'm less than 100 people, but i still want to give my employees an update and bring them up to speed on this because they don't understand what's happening. >> and it's an extraordinary coincidence, each one of you identified a date prior to november 6 which is election day, so this is something thems. williams, as your company stopped or slowed down capital investment in an effort to conserve funds and in anticipation of sequestration? >> which we have done -- what we have done previously. the way we got our business, a lot of our business was that we would make prototypes and that's how we developed all thesebut i recently, as i was talk earlier, we went to an air force base and saw the 1969 technology. we personally invested lots of dollars in order to bring this up to current technology.
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we have done that. we are not through by any means, but we have done that. what concerns me is, will i be able to continue to finish that project? and if that happens i will lose those engineers. >> i just want you to know, i particularly appreciate it. i represent the communities of fort jackson, fort gordon. i currently represent paris island. i want the best for our troops. we -- for their health and safety, we want -- and we doit really is dependent on your efforts. i want to thank you for your prototype efforts and however wethank you. >> thank you, sir. mr. courtney. >> thank you, mr. chairman. and thank you for holding this hearing and the witnesses for your really important testimony here today. and i want to also note, mr. the
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sort of genealogy of sequestration, talking about the gramm-rudman act. there is the concept that is now lost in the midst of time a little bit and i think it's important for us to remember that was used at a time of structural deficit and one of the sponsors of it, then congressman graham, was quoted at the time saying, it was never the objective of gramm- rudman to trigger sequester. it was the threat of sequester, force compromise and action. obviously those are the critical two words that i think is our burden to satisfy here as members is, a, to compromise, and b, to act. if you finish the story of gramm-rudman, it was a bumpy ride to get to the point where we actually deal with the structural deficit that was at the time and it was not until george herbert walker bush that walked off some sacred cows to help the measure. it put in place pay-go rules.
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and the budget that president clinton passed in 1993 which changed the tax rates that finally intersected spending and revenue to a point where the first time in our lives we actually had the government public finances in balance. and by the way, we created 22 million jobs during that time period. and when i view the budget control act, which again i join the majority of people in this committee supporting passage, that is certainly the path that i think we voted for or should have been thinking we were voting for that compromised an action what was we were looking for, not a chainsaw goingand so it's going to require people to move off of pledges and some sacred positions to really fix the problem and, again, we have
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a historical precedent. we can do this. our country did it. and, again, your testimony, all of you here today, again, stakes are huge if we don't. the question, again, having that horizon, that stability which really provides the basis for you to move forward and plan and invest. and coming from a district where the construction of nuclear submarines sakes roughly four to five years, obviously a one- year horizon is not enough. in terms of really trying to, you know, get to that sweet spot of efficiency and quality. and one of the measures that we've been voting on here is just a one-year fix to sequestration. and i was wondering if you could sort of comment whether or not that in your mind really fixes the problem or just delays it and just again leaves the challenge of trying to do intelligent planning sort of out there for just a short period of>> well, we're a long
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cycle business. our products last 20, 30, 40 years. right now we don't have six months visibility which is a unprecedented plea -- which is unprecedentedly short. and we are doing our business planning in one year, three years, five years. i think the best suggestion i could give, recognizing how complex and difficult the actions will be associated with this suggestion is a complete, a comprehensive and durable approach is i think the very best solution. when we look at the challenges in our company, we think a lot about growth. the growth of our business, and i think you could extrapolate the growth of our country is through competitiveness. that means getting the best talent, investing in that talent, getting the best innovation. that investment cycle is
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absolutely determined of how much visibility and how much certainty or uncertainty is in the environment. right now there is crushing uncertainty that's limiting all of that. so the more comprehensive a solution that could be put together, the longer duration of that would clear the debt chairs considerably and i think open up businesses to take action that would lead to that kind of growth that we are looking for in our business. >> to the extent that this is useful for prompting process reform and adherence with than the determination of public policy and public finance choices, that is terrific. to the extent those that it also serves to create unrest in the marketplace, a complete lack of confidence and stability because of the prospect of this sort of damocles, as it was called
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historically as part of religion, to the extent it can be used, this is a double edged sword. in some respects, perhaps as stock -- a hobson's choice. those that have to wrestle with this question i do not envy at all. >> the gentleman's time has expired. >> thank you, ladies and gentlemen. we appreciate your perspective. it has been very telling in terms of what may be looming if sequestration takes place. i want to summarize. uncertainty, instability, under arrest. obviously as this goes to what you pointed to along with your
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intellectual capital and human capital, that affects that significantly. it is those intellectual capacity assets that are most valuable, but if we lose those or those are weakened, that weakens us in the future. even if this is put off. that uncertainty is building. those things are concerning to me. if we do get to the sword of damocles, as it has been termed, of ceqa station, what effect will that have on your current contracts? while those contracts have to be terminated by default, and if so, what does that mean for your employees, for your partners, for your suppliers? at think that has a significant
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effect. what will happen with the restructuring of those contracts? what happens if, and what does that mean? i would like to give your perspective on what that will hold. >> we think it will affect thousands. we do not believe these terminations would be for default, because it is not a for cause termination. if the contracts were terminated. contracts can be reformed without being terminated, which i suspect will be in the majority of cases. we will just buy fewer or less, and that would require folks like us to go into the parent -- the supply chain and reschedule all of those for a resources.
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they will look at that action and call that a business disruption. as a result, they will formulate a claim, a request for equitable adjustment for consideration in the contract. one of the areas we are still trying to deal with is that this is a net number. this is likely to be some disruption claims. do the cuts have to be deeper than $55 billion to achieve a net $55 billion out come? all of that will unfold very broadly, probably all at once, when we get agency guidance about terminations or reparations of contracts, and that will include a huge amount of effort to prepare these claims and to deal with this administrative environment.
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>> the recommendation as well as what stevens has walked through, to simply add, this is going to be an appointment at for auditors. if you are an attorney, this will be a great opportunity to do all kinds of things in the future, because everything has to be subject to review. this is just about impossible to estimate what this will be at this juncture. >> i think your questions are a very good one, and one that has not been considered is clearly the cost to sequestration that has not been considered, and i think bob described it well, but, clearly, if you look at the volume of contracts that would have to be priced and the request for equitable consideration, it is a huge task, both for the contractor as well as for the department of defense to administer all of
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that. we do not know how that would be accomplished. >> effect i think, i have already had five contracts put on hold. they have not been stopped. in fact, idea and asked by the contractor, when can you finish this? it is that simple. they are not forthcoming. when you ask where the funds are, when we can expected, you cannot, so we are virtually shut down with those contracts right now. >> the gentleman's time has expired. mr. johnson. >> thank you, mr. chairman. i have to tell you, i have to pinch myself. i thought i might be dreaming. house republicans are holding hearings to talk about cuts to government spending and how they
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will hurt to jobs and the economy. it is really amazing. no one thinks sequestration is a good idea. the meat axe approach to defense cuts is irrational, and it is obviously bad policy, and it was designed by my colleagues on the other side of the aisle, the republicans, to be so bad that we would make tough decisions about raising revenues and cutting spending so we can avoid it. nevertheless, here we are, playing brinkmanship again, the same folks who self righteously opposed the president obama $700 billion stimulus package, the same folks who sneered and say that the government never created a single job in america and never would, they are now wringing their hands because of the impact on jobs of about $50
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billion in defense cuts in 2013, and of course $500 billion over 10, but $50 billion next year. now, there is an easy way out of this. make tough choices and tough compromises to raise revenues, cut spending, and meet our budget targets. the president is willing to do that. but the republican solution is the ryan budget. training programs, cutting food stamps, health care for children, the senate and the poor, foreclosure prevention, and cutting taxes for the rich, and blow this up with a missile shield, nuclear facilities that nobody wants and billions of dollars of waste, far in excess of caps. with all due respect to our
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witnesses today, you will not see house republicans call and community leaders, church leaders, the owners of mom and pop businesses, or struggling homeowners to testify on the impact of all of these cuts to help the poor and the jobless and the sick. now, to our witnesses today, each of you are highly talented, highly sought after executives, and i imagine that you are pretty well compensated for the values that you add to your companies, and i deeply respect that. as you have made clear, they are also rightly concerned about the impact of sequestration on your businesses, your employees, and our country's national defense. my first question is, would each of you be willing to forgo the 4% to 5% of your annual income
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that you save under the bush tax cuts in order to avoid sequestration? yes or no, mr. stephens? >> i am afraid i am not want to be able to give you a yes or no answer to your question, sir, and i offer that to you respectfully. >> mr. o'keefe? >> sure. i think the choice of revenue and spending is entirely the prerogative of others. >> would you be willing to forgo your savings it the bush tax cuts were made permanent in lieu of sequestration? would you rather undergo sequestration, or what is your position? >> my opinion of the priority is far less significant than yours. >> you are not going to give me an answer. >> that is a prerogative that is really important for you to make
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those choices. >> i got you. how about you, ms. hess? >> i will do the same. >> all right, nobody wants to give up their 4% or 5% that they would save it the bush tax cuts were made permanent. that is exactly the sentiment that is being represented by the republicans here in congress. they will not impose any taxes, any tax increase on the as you can afford to bear it, because of the grover norquist pledge, and my time has expired. >> my time has expired. >> a justin upton on how we got here. we had last year, an opportunity to do the
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reconciliation or shut down the government, and all parties were involved. since then, we have passed in the house a solution. we have taken action in the house. the senate has done nothing but talk. all they have to do according to the constitution is passed the bill in the senate. then we would go to conference, and then we would have real negotiations and talk because plants had been laid out, but
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the senate has refused to take action, and the president has not given the leadership and direction to get it passed this point, so that is just correcting the history. >> thank you for being here. we do have different things. i fall into a different camp. i believe business is in bed with this. and the higher the tax rate, the higher the cost, and therefore the less they get to sell, they're forgetting -- giving an advantage to the overseas competitors, and if you listen to the president's initial speech, a couple of years ago, they talked about the fact that we needed to reduce the corporate income tax rate. he then turned around and withdrew and never gave us a specific proposal, but 18 months
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ago, i was a small-business owner. i will tell you that what i've found in my small business was my percentage of fixed costs were higher. i did not have the ability to do this the way the other competitors do. the last dollars worth of revenue -- the amount i paid income taxes, -- have you found that to be true? >> that is true. very much so. >> and that is where i am concerned about this anti-profit mentality that some have in washington right now, while our large industries, and i certainly want all of our large industries to be profitable, but it is what we are doing with the
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small businesses, and this goes with the large eyes. if you use a% of your revenue, and 8% revenue loss would be much greater on her, on her business and employees, so i want to go to you, because you talk about the back of the on the mathematics. you have got approximately an 8% operating margin in your business. is that correct? >> it is closer to 10%, but, yes, sir. >> and your problem is just about 6%? when you talk about your back of the honorable a mathematics, you have got approximately 120,000 employees. multiplied that, 10%, which will
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be a revenue. 80% some of your revenue is government business, so that is a 8% loss. that does not correlate. it also correlates with what you say your reduction in employees will be. nobody gets a paycheck. is that a fair statement? >> we performed against a set of objectives every year. it is an important objective. if you do not generate a profit, that would be correct. >> with public held companies. what are your obligations with regard to sequestration? hal is the impending threat of sequestration affecting your reporting, your shareholders, and the fact that this is currently the law? there are no plans to rescind
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this law other than what the house has done. again, what obligations to the three of you have to your shareholders? to discuss sequestration? >> i would say it is true of every high-integrity business person we know. transparency in our disclosures, and it is important, not taking unnecessary risks, but with honesty and accuracy. the status of the business and the risks, certainly to the equity investors, we have a collateral responsibility to the credit rating agencies, certainly to our customers and our suppliers, because they are our partners in this enterprise, so we have been disclosing in
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and others. >> i am short on time. >> we clearly plan to bid your to this, and we are looking to this. we do nab a responsibility to our shareholders and our boards. >> the gentleman's time has a expired. mr. ryan? >> thank you. back when i was younger, i used to coach like ninth grade basketball, and there was a stunning dynamic when you get into coaching. you can be a coach and see a coach, and they can be the most objective person in the world in analyzing their players, their talent, and then they lose all
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objectivity. they think their kid is of little better than they probably are, so their kids starts and all of the other stuff. in the midst of the little league season. it is just stunning they completely have a blind spot when it comes to government spending for the military. i represent akron, ohio, so we have a lockheed facility, locking defense. i get it. this is government spending, and it is creating jobs. this area we are talking about is that a cut in government spending is going to cost jobs, and that is why we are here, and we do not want to see that happen, and to have my colleagues from south carolina
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talk about the jobs in virginia that are going to be lost, or the warren notice, that was put in law by an ohio senator because the factories were being closed down in the 1980's, so we know what can potentially happen here, and i find it stunning that we can sit here and have a conversation about job losses because of these reductions. but turn around in the same breath and see that they had absolutely no effect. we need your help. there is a narrative in this country that every dollar that the government spends is a waste of money, should be privatized, outsourced, done by the private sector, so forth. transportation, education. i am not here to lecture
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anybody, but i think it is funny, because i just try to imagine if you were an energy company, and alternative energy company, if you were a smaller company, if you were a wind mill company, and there is government funded, and we need to put up windmills so we can reduce our dependency and get out of all these entanglements, you guys would be crucified right now. i am with that. i think it is a bad idea. it is terrible what is going to happen. all government funding is not bad. it is overwhelming.
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now, we are swimming upstream. this is very necessary. this is going to be affected by this. a guy like me, maybe we need some government funding for security in our neighborhoods, and we need to fund the program or grants. it would be crucified. i am a liberal tree hugger. government does not have the responsibility to do that. we have to get past this. this is the end result of 20 to 30 years of bashing the government, and here we are. sequestration is coming to a head right now. so i just want to ask a question. the time is short. we're going to have to go out and borrow money to make sure that the sequestration does not go online. we have got to borrow it.
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i do not think it is a good idea. help me make the argument to my constituents that it is ok to go out and borrow money to make sure that these cuts do not happen. can you help me make that argument? why it is that way at this point? why it is important for us to go out and maybe borrow until the economy recovers? can any of you make that argument? >> the gentleman's time has expired. he made some beautiful, eloquent arguments, but you will have to answer those for the record, it could. >> can i get those for the record? >> i will be happy to ask witnesses if they will provide it for the record. also for the record, this committee is the armed services committee. we have the responsibility to look after the defense, and we
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have the responsibility to provide. there is a difference between that and providing -- >> will the gentleman yield? >> -- we have a responsibility to provide for the general welfare. >> this is not the general welfare committee. this is the armed services committee. >> mr. chairman, we have an obligation to make sure that mr. stevens he is getting those bright, intelligent people. they have got a pell grant, education. >> we can go on, i am sure, mr. ryan -- >> i am happy to, mr. chairman. >> but we do not have the time, and we will now turn it over. >> i almost want to give you time to answer the question, but
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-- >> do you want to use your time for that? >> if we are going to have a written response, perhaps. you really are the titans of industry, big and small, and you have awesome responsibilities, not just to your shareholders and really to this nation, but that responsibility is very direct with the military, and the defense of this country, as the chairman pointed out, but your responsibilities because of your position go far beyond that. it really goes towards providing leadership. we have had some discussion from mr. johnson and now mr. ryan. i think it is really important. i do not want sequestration. i voted not to have sequestration, but the real question is about the deficit
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and about the financing of our government. and it is either going to be cut, we have argued against cuts in the defense industry, ok, and my question is then what do we cut, and/or, and/or do we raise revenue? and i want you to answer this question as a leader in america that each of you are. mr. stevens, what do we do? do we make cuts in other areas, and if so, what? if we raise revenue, where? >> i am flattered that you would look at this. my board holds me accountable. members of the community in which we live and work. we look toward you as leaders. you are our leaders. we have a portfolio of responsibilities in our company. that is our domain. i look to you.
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it is incredibly complicated services. >> excuse me. the leisure company contribute to political contributions, political action groups, and to those action groups express your opinion? >> we to contribute to them, yes, sir. >> for example, do you contribute to the u.s. chamber of commerce? >> we do. >> do you agree there should be no tax increases? >> we contributed those that we think express the view that we have, which i believe is the focus of the committee's attention today, and my role is to communicate the disastrous effects of the sequestration that will to chivvy to national security. >> i am going to forgo the rest, unless you want to answer my question. the reality is that price times now you have been asked the question.
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i want to ask you to take this up. you are leaders. mr. o'keefe, you were the leader of a very successful university. you have not given up your leadership role. we have a very difficult situation. we have to come to grips with the reality and put aside all of the rhetoric we have here, and we are more than willing to do this, but you also have a responsibility, and i would ask you to ponder this. if you do not want cuts in the military, then where do we cut?
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social security? medicare? employment opportunities? education? and what revenue do we cut, or do we do it at all? i do not want to put you on the hot seat anymore, but i would ask you to take up your larger responsibility as very, very influential men and women. thank you very much. >> i very much appreciate the spirit and context of your commentary, and that is primarily what you have offered here, and certainly we all accept the leadership responsibility we bear, and that is why we are here. we have spoken to a mechanism on have to achieve these reductions, not what the alternatives are.
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these are complex challenges. again, you have observed the importance of really having the opinion of citizens, and that is a separate point. there is the challenge of revenue and spending and objectives, and how that gets sorted out, there are methods to do it, and this is one we are advising is more destructive than others. not where it is applied. it is across the board, all discretionary spending, just as observed in the very opening comments. >> the gentleman's time has expired. we just received news of a terrorist attack on a bus in bulgaria, and i want to express my condolences to them and our ally, bulgaria.
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>> i want to follow up. when we get down to the tough question of how to avoid this, basically, it is up to us, as if everybody else in the country has no role whatsoever to play in public policy decisions. let me tell you, that attitude express is the number one biggest problem that we have, the notion that you have no responsibility in solving the problem. the on the responsibility you have is explaining to us how bad it will be in one given area. is that what public policy has come down to in this country? and i will say this, you are in no way unique. everyone is concerned about what happens. they are concerned about the tax going up or about something else, and then we come down to how to add it up. we cannot have anything to do with that.
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what happens is we divide and destroy, and every little piece of our country, to protect themselves and make no argument beyond that. it is much easier to say do not cut this, do not raise that tax. hard part is we all have some responsibility for making choices, and you flat refused about making those choices and dump it all on us. meanwhile, do not only flatly refused to say anything about it, but you also systematically kick our legs out from under us as we try to deal with it. even if it is with taxes, if nobody is advocating for the toxic cuts and the types of tax increases that are necessary to deal with our government, then you are never going to build the political support necessary to get this nation to support those
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steps. it is not going to happen, and everybody hides behind that, and i know why. and i will say this. we have a far, far greater responsibility. we are the only ones that ultimately have to vote and will be held accountable. that greater responsibility is based in, and there is no way for us to do that, but group after group coming up here and singing do not cut this, do not raise that tax, and balance the budget, and then they refuse to move the needle at all on a solution to that, refuses to take a leadership role in moving the debate in the direction to get us to acknowledge that choices have to be made, we are dead. there is no way we can get public opinion. i will close with this.
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from 2011, asking people what about the deficit, people say to balance the budget, and the listed every single area that the government spends money and ask if you would like to see the spending cut the same, cut, or increased. in every single category, they say foreign aid. 99% of where we spend our money, two-thirds say to increase it or keep it the same. those exact same people who express concern about the size of the deficit. and then asking if they want to raise taxes, and they say no. how do people form these opinions? they form these opinions because all they hear our people advocating for the tax cuts. this is why we get a little vexed when people up here say you are going to kill our
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industry. but the reason you're in the position you' i because of the problems with the deficit. ok, what do we do to get out of it? you have nothing to say on that. or do not increase spending. so what you're doing is not helping. we often advocate for things that do not add up. i am only here to talk about my area, so do not talk about the rest. we need help in gting t public to support this. if they do not, it will not happen. >> my good friend, i sometimes disagree. this is one of those times.
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none of us was forced to run for this job. each of us chose to run for the house of representatives. we understand that we of the responsibility to make decisions. these people are here today at our request to talk about the guidance that they need to implement the laws that we have passed. i have not heard them say do not cut defense. maybe we should have another hearing on that, but i have not heard them say that. we have already implemented $487 billion. we are taking care. you have passed a law that is going to cut another $600 billion out of defense. we just want to know how as business people do you expect us to comply with the law that was passed and carry out those upsets -- those to the best of our ability.
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that is what they have advocated and talked about. i come from a small business background. it was not anything like building ships or planes or boats. we sold western wear. a pretty simple little business, a family business, but even at that level, we went to the market to buy products that we were going to buy for the first half of the year, and we would go to the different booths, and we would buy shirts and hats and jeans, and they would be shipped in a timely matter so we would have inventory in february and march and may, and they would come in and expect that we had the size that we needed. meanwhile, the suppliers after we gave them orders, they would go and buy the things they needed to make the genes and the hats and the brits, and it was
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done in an orderly method because we did not have the government involved. they are trying to run their business in an orderly manner, and they need to know what to do in january and february and march so that our war fighters that are over and afghanistan right now, going outside the area and putting their lives on the line will have what they need to protect themselves and to carry out their mission with the direction of our commander- in-chief. i applaud them for the job that they do. i applaud all of our work force that is invested in that and gets up every day, goes to work, with the best of their ability trying to carry out their mission to see that those -- that those fighters return home.
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that is the responsibility of this committee, and we will continue to carry out that responsibility. i also sit on the education committee, and i can talk about things, but while i am here as chairman of this committee, we will carry out that mission of looking out for our war fighters who are putting their lives on the line. thank you very much for being here today. i have one other final question i would like to submit for the record. we have omb coming up the first of august to testify. you have all talked about things you would like to see, but i would ask if you would please describe, except for ms. williams and does not have to deal with this, so that we can give them the questions beforehand, necessary for you to be able to make decisions related to the sequestration.
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if you can get this to us so we can get it to them so our hearing on august 1 will be productive, thank you. this hearing stands adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> the agriculture secretary talks about the drought, and an goldman sachs' c.e.o. lloyd blankfein. tomorrow, watch janet napolitano live on c-span3 and c-span.org.
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>> it was about those men and women who are injured in war. because of the huge advances made in medical trauma treatment, they are being saved, and i wanted to look at what life is like for these people. having seen some people who were pretty gruesomely name, would it not be better off if they were dead? do they not wish that they were dead? >> the 10-part pulitzer winning series, and in the book, speaking with veterans and their families as well as surgeons, combat veterans, and more on the daily struggles for those wounded.
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learn more sunday at 8 on the c- span. >> live coverage featuring the u.s. senate. on weeknights, watched he public policy events, and every weekend, the latest nonfiction authors and books. you can get our schedules at our website, and you can join in the website at social media sites. >> tom vilsack discussed the in administration efforts to assist farmers and ranchers affected by the largest trout in the u.s. since 1988. almost one-third of the counties have been declared disaster areas as a result of the drought, which is affecting almost 60% of the country. >> thank you very much.
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welcome, everybody, to the white house daily briefing. i've i think you had advanced warning of, i have today the secretary of agriculture, tom vilsack. as you know, he briefed the president on the drought that is affecting a significant portion of the country. the president asked for this briefing, and i asked that the secretary join me here today to give me an update -- to give us an update on issues surrounding the drought. during his presentation, then asking questions that you have for him, i will, of course, remain here ready to take your questions on another subject, and with that, i give you secretary vilsack. >> the president is well
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informed on the circumstances surrounding a very serious drought, the most serious situation we have had maybe in 25 years across the country. 61% of the land mass in the united states is being characterized as impacted by the drought, and our hearts go out to the families who are struggling with something they have obviously no control over and tried to deal with a difficult circumstance. there is no doubt this is having an impact on our crops. 70% of the corn crop is now in an area that is affected. 7% of the soy beans are also impacted, and also involves other commodities as well. 38% of our corn crop is rated at port to very poor. many of our soya beans, and this will have an impact on the yields. right now, we have indicated yields are down about 20 bushers to the acre of corn and about 3
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bushels per acre for the beans. that may be adjusted upwards or downwards. this will result in significant increases in prices. for corn, we have seen the increase, and a bushel of beans has risen 24%. the first thing we did was to streamline the declaration system, reducing the amount of time it takes to have a county designated. this means that they are able to access low interest loans. the president asked us. and our livestock producers are in deep trouble because of the drought.
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they have no place for their cattle. they are looking at very high feed costs. normally when this happens, producers have to return a portion of what they received. and our tools are somewhat limited, so we have to work with congress to provide congress or a traditional disaster programs or to provide help and assistance to our farmers. the question that a lot of folks were asking is what the impact would be on food prices. because livestock producers will be potentially reducing their herds because of higher feed costs, we would anticipate food prices that they may go down a
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bit, but over time, it will rise. we will probably save those higher prices at the first part of next year. this is impacted with crop yields, and we would likely see the increase of that also in 2013. it is important to know that they receive on the 14 cents of every dollar that goes through the food store, farmers. it does not necessarily translate into large increases in food prices, and people beginning to see these increases now, it is not in any way, shape, or form related to the drought, and we should keep an eye on that to make sure that people do not dig in vantage of a very painful situation. there is some degree of technology.
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this can sometimes relate to better yields. as of today, 1297 counties have been designated as disaster areas. that is approximately one-third of the counties in the united states. new mexico, tennessee, utah, y yao ming, arkansas, indiana, ga., and mississippi. we have staff which is now traveling in order to get a firsthand look at conditions, and we will do everything we possibly can, but we will need help working with congress for greater flexibility to revive the disaster programs that were allowed to expire last year or in order to pass a jobs bill. >> thank you. thank you, mr. secretary.
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two follow-up, is there a specific amount that you are seeking in aid from congress? >> it is difficult to pinpoint that would specificity, because we do not know what the impact will be. the corn crop would still be the third largest corn crop in the united states history. the reason is because there were more acres planted at the beginning of the year. in the meantime, we can look at the passage of the bill so that we are prepared to move precisely when we know what the impact will be. for the most part, this will provide about 72% coverage

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